AES CORPORATION: Improved Liquidity Cues Fitch to Lift Ratings--------------------------------------------------------------Fitch Ratings has upgraded and removed the ratings of AESCorporation from Rating Watch Positive, where it was initiallyplaced on Jan. 18, 2005 pending review of the company's year-endfinancial results. The Rating Outlook is Stable.

Following the completion of its review, Fitch's upgrade reflectsthe significant progress AES had made in retiring parent companyrecourse debt and improving liquidity. In addition, AES hasrefinanced several near term debt maturities and extended thecompany's debt maturity profile. The company has successfullyaccessed both the debt and equity markets in 2004 and 2003.

Furthermore, AES has in place a $450 million revolving creditfacility which significantly improves the company's liquidityposition. Finally, management has affirmed the goal of continueddebt reduction committing to $600 million in parent company debtretirements in 2005. In this regard, AES called for earlyredemption approximately $112 million of notes in May 2005. Thesenotes were redeemed in full on June 1, 2005.

While AES has made significant progress in reducing debt andimproving liquidity, Fitch recognizes that the company'smanagement emphasis has shifted from debt reduction to a resumedfocus on growth. AES recently made two acquisitions in thedomestic wind power generation sector. While these acquisitionshave been modest, Fitch notes that wind is a new technology forAES and as such, raises some execution risk.

Internationally, AES has indicated that growth will be focused onplatform extensions (i.e. expansion opportunities around existingassets) and 'emergent' countries (i.e. countries which areapproaching developed nation status). Management has stressedthat such expansion will be funded with a prudent mix of equityand debt. Fitch's rating and Outlook would be adversely affectedif AES' future investments result in escalating parent companyleverage.

This rating action does not affect the ratings of other AESaffiliates rated by Fitch listed below. In general, these ratedentities are bankruptcy remote from AES by virtue of their legalstructure or by virtue of their country of location. Theseentities include:

Fitch placed the ratings of IPALCO Enterprises Inc., andIndianapolis Power & Light Company on Rating Watch Positive onJan. 18, 2005. The ratings of these entities which arepotentially affected by the AES ratings upgrade will be resolvedin the near future.

AES is a leading global power company, with 2004 sales of $9.5billion. AES operates in 27 countries, generating 44,000megawatts of electricity through 124 power facilities and deliverselectricity through 15 distribution companies.

ACCEPTANCE INSURANCE: Exclusive Plan Filing Intact Until Sept. 5----------------------------------------------------------------The U.S. Bankruptcy Court for the District of Nebraska extendeduntil Sept. 7, 2005, Acceptance Insurance Companies, Inc.'s periodwithin which it alone can file a chapter 11 plan. The Court alsoextended until Nov. 7, 2005, the Debtor's exclusive period tosolicit acceptances of that plan.

The Debtor has an interest in Acceptance Insurance Company and aTakings Claim against the United States of America. The Debtor isstill continuing to diligently manage and resolve claims withinAcceptance Insurance to maximize the value of the company for thebenefit of the Debtor's creditors.

The claims resolution at Acceptance Insurance is not yet at astage that will permit the Debtor to formulate an optimal chapter11 plan. The Takings Claim dispute is still in the initial stagesof litigation and that will also affect the formulation of achapter 11 plan.

The Debtor related that the Unsecured Creditors Committee hasconsented to the requested extension of the exclusive periods asproof that the Debtors' request is not a negotiating tactic on itspart to force creditors and other parties-in-interest intoaccepting an unacceptable plan.

Headquartered in Council Bluffs, Iowa, Acceptance InsuranceCompanies Inc. -- http://www.aicins.com/-- owns, either directly or indirectly, several companies, one of which is an insurancecompany that accounts for substantially all of the businessoperations and assets of the corporate groups. The Company filedfor chapter 11 protection on Jan. 7, 2005 (Bankr. D. Neb. CaseNo. 05-80059). The Debtor's affiliates -- Acceptance InsuranceServices, Inc., and American Agrisurance, Inc. -- filed separatechapter 7 petitions (Bankr. D. Nebr. Case Nos. 05-80056 and05-80058) on Jan. 7, 2005. John J. Jolley, Esq., at Kutak RockLLP, represents the Debtor in its restructuring efforts. When theDebtor filed for protection from its creditors, it listed$33,069,446 in total assets and $137,120,541 in total debts.

ADELPHIA COMMS: Founder Sentenced to 15 Years in Prison-------------------------------------------------------Judge Leonard Sand of the U.S. District Court for the SouthernDistrict of New York sentenced John Rigas, the 80-year oldfounder of Adelphia Communications Corporation, to 15 years inprison for looting hundreds of millions of dollars from thecompany.

The Rigases are ordered to surrender on September 19 to begintheir prison terms.

Judge Sand said John Rigas' sentence may be reduced should hebecome terminally ill in the next two years. John Rigas issuffering from bladder cancer and a heart ailment.

Bloomberg News reports that Judge Sand would have sentenced JohnRigas to a longer term if not for his age and poor health. JohnRigas faced a maximum of 215 years behind bars, effectively alife sentence, David Glovin of Bloomberg wrote.

According to Mr. Glovin, before Judge Sand passed the sentence,John Rigas said, "If I did anything wrong, I apologize. It's inyour hands, and in God's hands. In my heart and conscience, I'llgo to my grave really and truly believing that did nothing but toimprove conditions for my employees."

The New York Times notes that Judge Sand found John Rigas'insistence of innocence "unacceptable." Judge Sand is notconvinced that there was no blatant fraud.

Headquartered in Coudersport, Pennsylvania, AdelphiaCommunications Corporation (OTC: ADELQ) is the fifth-largest cabletelevision company in the country. Adelphia serves customers in30 states and Puerto Rico, and offers analog and digital videoservices, high-speed Internet access and other advanced servicesover its broadband networks. The Company and its more than 200affiliates filed for Chapter 11 protection in the SouthernDistrict of New York on June 25, 2002. Those cases are jointlyadministered under case number 02-41729. Willkie Farr & Gallagherrepresents the ACOM Debtors. (Adelphia Bankruptcy News, Issue No.97; Bankruptcy Creditors' Service, Inc., 215/945-7000)

ADELPHIA COMMS: Reports Forfeiture of Rigas Securities to Gov't.----------------------------------------------------------------In a regulatory filing with the Securities and ExchangeCommission, Adelphia Communications Corp. reports that under aConsent Order entered by the U.S. District Court for the SouthernDistrict of New York on June 8, 2005, all securities of ACOM andits subsidiaries owned by the Rigas family were forfeited to theUnited States.

Pursuant to ACOM's records, the forfeited securities beneficiallyowned by members of the Rigas family include:

-- 60,751,992 shares of Class A Common Stock, par value $0.01 (representing around 22.8% of the outstanding shares of Class A Common Stock based on the shares of Class A Common Stock outstanding as of April 30, 2005); and

The Class B Common Stock is a "super-voting" common stock thatentitles the holders to 10 votes per share.

Headquartered in Coudersport, Pennsylvania, AdelphiaCommunications Corporation (OTC: ADELQ) is the fifth-largest cabletelevision company in the country. Adelphia serves customers in30 states and Puerto Rico, and offers analog and digital videoservices, high-speed Internet access and other advanced servicesover its broadband networks. The Company and its more than 200affiliates filed for Chapter 11 protection in the SouthernDistrict of New York on June 25, 2002. Those cases are jointlyadministered under case number 02-41729. Willkie Farr & Gallagherrepresents the ACOM Debtors. (Adelphia Bankruptcy News, Issue No.97; Bankruptcy Creditors' Service, Inc., 215/945-7000)

AMC ENTERTAINMENT: Inks Merger Agreement with Loews Cineplex------------------------------------------------------------AMC Entertainment Inc. and Loews Cineplex EntertainmentCorporation entered into a definitive merger agreement that wouldresult in the combination of their businesses.

The merger agreement also provides for the merger of theirrespective holding companies, Marquee Holdings Inc. and LCEHoldings, Inc., with Marquee Holdings Inc., which is controlled byaffiliates of J.P. Morgan Partners, LLC and Apollo Management,L.P., continuing as the holding company for the merged businesses.The current stockholders of LCE Holdings, Inc., includingaffiliates of Bain Capital Partners, The Carlyle Group andSpectrum Equity Investors, would hold approximately 40% of theoutstanding capital stock of the continuing holding company.

The merged company, to be called AMC Entertainment Inc., will beheadquartered in Kansas City, Missouri, and will own, manage orhave interests in approximately 450 theatres with about 5,900screens in 30 states and 13 countries. Peter C. Brown, AMCChairman of the Board, Chief Executive Officer and President, willremain in this role in the merged company. When combined, thecompany will have approximately 24,000 associates serving morethan 280 million guests annually. An integration committee willbe formed in which Travis E. Reid, President and Chief ExecutiveOfficer of Loews Cineplex Entertainment Corporation, and Brownwill serve as co-chairs. The integration committee also willinclude representatives of the two sponsor groups.

"This merger is a combination of the oldest and most respectednames in the business -- AMC and Loews," said Brown. "Thetransaction provides us with a unique opportunity to blend thebest practices of two remarkable organizations as we create anextraordinary company."

Mr. Reid said: "This merger is a historic moment in the exhibitionindustry. We are bringing together two companies with long-standing traditions of innovation and leadership, as well ascultures that focus on the highest quality guest service. Peterand his team have done a great job leading AMC, and I look forwardto working with them."

The companies plan to refinance their senior credit facilities inconnection with the closing of the merger. The merger will notconstitute a change of control for purposes of the outstandingsenior notes of Marquee Holdings Inc. or the outstanding seniornotes or senior subordinated notes of AMC Entertainment Inc. Whileit has not yet been determined whether the merger will require achange of control repurchase offer under Loews CineplexEntertainment Corporation's outstanding 9% Senior SubordinatedNotes due 2014, the companies have secured commitments torefinance such notes to the extent that such an offer is requiredunder the indenture governing such notes.

Completion of the merger is subject to the satisfaction ofcustomary closing conditions for transactions of this type,including antitrust approval and completion of financing. It isanticipated that the merger will close within six to nine months.

About J.P. Morgan Partners, LLC

J.P. Morgan Partners, LLC -- http://www.jpmorganpartners.com/-- is a leading private equity firm with over $12 billion in capitalunder management as of March 31, 2005. Since its inception in1984, JPMP has invested over $15 billion in consumer, media,energy, industrial, financial services, healthcare, hardware andsoftware companies. With approximately 95 investmentprofessionals in six principal offices throughout the world, JPMPhas significant experience investing in companies with worldwideoperations. JPMP is a private equity division of JPMorgan Chase &Co. (NYSE: JPM), one of the largest financial institutions in theUnited States, and is a registered investment adviser with theSecurities and Exchange Commission.

About Apollo Management, L.P.

Apollo Management, L.P., founded in 1990, is among the most activeand successful private investment firms in the United States interms of both number of investment transactions completed andaggregate dollars invested. Since its inception, ApolloManagement, L.P. has managed the investment of an aggregate ofapproximately $13 billion in equity capital in a wide variety ofindustries, both domestically and internationally.

About Bain Capital Partners

Bain Capital -- http://www.baincapital.com/-- is a leading global private investment firm that manages several pools of capitalincluding private equity, venture capital, high-yield assets,mezzanine capital and public equity with more than $25 billion inassets under management. Since its inception in 1984, BainCapital has made private equity investments and add-onacquisitions in over 225 companies around the world, includingmedia and entertainment companies Warner Music Group, LoewsCineplex Entertainment, ProSiebienSat1. Media AG, and ArtisanEntertainment. Headquartered in Boston, Bain Capital has officesin New York, London and Munich.

About The Carlyle Group

The Carlyle Group -- http://www.carlyle.com/-- is a global private equity firm with nearly $30 billion under management.Carlyle generates extraordinary returns for its investors byemploying a conservative, proven and disciplined approach.Carlyle invests in buyouts, venture capital, real estate andleveraged finance in North America, Europe and Asia, focusing onaerospace & defense, automotive & transportation, consumer &retail, energy & power, healthcare, industrial, technology &business services and telecommunications & media. Since 1987, thefirm has invested $13.4 billion of equity in 396 transactions.The Carlyle Group employs more than 560 people in 14 countries.In the aggregate, Carlyle portfolio companies have more than $30billion in revenue and employ more than 131,000 people around theworld.

LCE Holdings, Inc. -- http://www.enjoytheshow.com/-- is a holding company that conducts its business through its subsidiary LoewsCineplex Entertainment Corporation. Loews Cineplex EntertainmentCorporation is one of the world's leading film exhibitioncompanies that owns, operates or, through its subsidiaries andjoint ventures, has an interest in 221 theatres with 2,218 screensin the United States, Mexico, South Korea and Spain. LoewsCineplex Entertainment Corporation, headquartered in Manhattan.

About Marquee Holdings and AMC Entertainment

Marquee Holdings Inc. -- http://www.amctheatres.com/-- is a holding company that conducts its business through its subsidiaryAMC Entertainment Inc. AMC Entertainment Inc. is a leader in thetheatrical exhibition industry. Through its circuit of AMCTheatres, AMC Entertainment Inc. operates 229 theaters with 3,546screens in the United States, Canada, France, Hong Kong, Japan,Portugal, Spain and the United Kingdom. AMC Entertainment Inc.,headquartered in Kansas City, Missouri.

* * *

As reported in the Troubled Company Reporter on Aug. 5, 2004,Standard & Poor's Ratings Services revised its outlook on AMCEntertainment, Inc., to stable from positive, based on theincreased leverage that will result from the pending sale andrecapitalization of the company.

At the same time, Standard & Poor's affirmed its ratings,including its 'B' corporate credit rating, on the company. Inaddition, Standard & Poor's assigned its 'B' corporate creditrating to Marquee Holdings, Inc., and its subsidiary Marquee, Inc.Upon completion of the sale of AMC, Marquee, Inc., will be mergedwith AMC. All of these companies are analyzed on a consolidatedbasis.

AMERICAN HEARTLAND: SEC Files $2.5 Mil. Fraud Case in N.D. Tex.---------------------------------------------------------------On Apr. 7, 2005, the Securities and Exchange Commission filed anemergency action in the United States District Court for theNorthern District of Texas against Philip D. Phillips dba AmericanHeartland Sagebrush Securities Investments, Inc., and SagebrushSecurities, American Heartland, Inc.

The Commission charged that Mr. Phillips, a securities broker,bilked investors out of approximately $2.5 million on the falsepromise that he would invest their funds in safe income-generatingsecurities. The Court granted a temporary restraining order,asset freeze and other emergency relief against Mr. Phillips andSagebrush.

In its complaint, the Commission alleges that Mr. Phillips luredinvestors with a number of misrepresentations:

2) Mr. Phillips falsely promised investors in "consultations" with them that he will purchase specific securities in their names;

3) Mr. Phillips assured the investors, falsely, that their funds will remain safe, and claimed, falsely, that their "Sagebrush accounts" are SIPC insured; and

4) on a monthly or quarterly basis, as "evidence" of the purported success and safety of the investments, Mr. Phillips prepared and delivered to investors bogus "account statements" purportedly reflecting the composition and value of their investments.

The Commission further alleges that Mr. Phillips fraudulentlyfailed to disclose to investors that he misappropriated a largeportion of the their funds, and that he did not, in fact, purchaseor hold in the investors' names the securities reflected on theinvestors' "account statements."

The Commission also named Kirby J. Curry as a relief defendant inits complaint, based on his alleged improper receipt of investorfunds. The Commission seeks to freeze any investor funds underMr. Curry's control.

The Commission alleges in its complaint that Mr. Phillips, dbaSagebrush, violated Section 17(a) of the Securities Act of 1933,and Section 10(b) of the Securities Exchange Act of 1934 and Rule10b-5 thereunder.

On June 20, 2005, the U.S. District Court for the NorthernDistrict of Texas, Amarillo Division, authorized Walter O'Cheskey,the appointed Receiver, to file a chapter 11 petition.

American Heartland Sagebrush Securities Investments, Inc., holdsinvestor funds. The Debtor is under receivership and WalterO'Cheskey is the appointed Receiver. The Debtor filed for chapter11 protection on June 21, 2005 (Bankr. N.D. Tex. Case No. 05-50761). Max Ralph Tarbox, Esq., at Law Offices of Max R. Tarboxrepresent the Debtor. When the Debtor filed for protection fromits creditors, it listed $185,300 in assets and $1,172,892 indebts.

ANTEON INTERNATIONAL: Moody's Upgrades $365MM Debt Rating to Ba2----------------------------------------------------------------Moody's Investors Service upgraded ratings on Anteon InternationalCorporation one notch, with both the Corporate Family Rating(formerly known as the "senior implied rating") and the rating onthe senior secured credit facility moving to Ba2. The ratingsoutlook has been changed to stable.

* $165 million senior secured Term Loan B, due 2010, upgraded to Ba2 from Ba3

* Corporate Family Rating, upgraded to Ba2 from Ba3

* Senior Unsecured Issuer rating, upgraded to Ba3 from B1

The rating action reflects Anteon's strong financial performanceover the last two years. The company's performance continues tobenefit from United States government spending on defense andhomeland security and increased trends toward governmentoutsourcing of information technology and other services.

Anteon experienced overall sales growth of 21.7% in 2004 (14.2%organic) and 26.2% in 2003 (16.2% organic). Operating margin alsoimproved by about 30 basis points in both 2003 and 2004, reaching8.4% for 2004. Results for the fiscal first quarter ended March31, 2005 were also positive, with revenues up 21.5% and organicgrowth up 17.1% year over year.

Anteon has improved its credit profile as its business hasimproved. Total debt to EBITDA improved to about 1.4x in thetwelve months ended March 31, 2005 from about 1.8x at year-end2003. EBIT interest coverage has improved to about 13.4x for thetwelve months ended March 31, 2005 from about 3.4x at year-end2003. Free cash flow from operations to debt was 39% for thetwelve months ended March 31, 2005 and 21.6% in the year endedDecember 31, 2003. Quarterly free cash flows have been volatiledue to the timing of collection of accounts receivable fromgovernment agencies.

The ratings benefit from Anteon's diverse customer base of over800 active contracts at more than 50 US government agencies(mostly within the Department of Defense). Anteon also benefitsfrom a historical record of winning over 90% of its contracts forwhich it has been required to recompete. Anteon has an estimatedremaining contract value of about $6.4 billion, which includes afunded backlog of $871 million at March 31, 2005.

The ratings are limited by:

* Anteon's history of acquisitions and the expectation that future acquisitions will likely increase leverage;

* the company's modest size relative to its larger industry competitors; and

* participation in the highly competitive market for information technology services in which capital requirements are limited and barriers to entry low.

In addition, Anteon derives approximately 98% of its revenues fromthe US government including 89% from the Department of Defense.The largest customer group is the US Navy, which accounted forabout 45% of revenues in 2004. The top 10 contracts accounted for44% of revenue in 2004. Government contracts can be terminated atthe will of the US government in response to changes in policies,programs, or administrations.

The Ba2 rating on the credit facility, rated the same as thecorporate family rating, reflects the preponderance of seniorsecured debt in the capital structure. The company's existing andfuture domestic subsidiaries unconditionally guarantee repaymentof amounts borrowed. Substantially all assets of the company andits subsidiaries, including the capital stock of the company'ssubsidiaries, secure borrowings under the facility.

The stable outlook anticipates that Anteon will continue tobenefit from the US government's increased spending on defense andhomeland security, particularly in the areas of operations andmaintenance, and increasing utilization of outsourcing of servicesin the context of an aging government workforce. Moody's expectsthe company to pursue acquisitions that are modest in size andcomplementary to Anteon's existing businesses. Moody's alsoexpects that acquisitions are likely to be funded in a way thatresults in total debt/EBITDA of 2.5x or less.

The ratings could be upgraded, if Anteon exhibits continuedorganic sales growth, consistent free cash generation, and astable credit profile over the intermediate term, within thecontext of modest acquisition activity.

The ratings could be downgraded, if Anteon:

* increases leverage due to a large, debt-financed acquisition or recapitalization that substantially weakens credit metrics;

* or suffers a substantial deterioration in revenues and free cash flows due to declines in US defense spending, a loss of key government contracts;

ATA AIRLINES: Balks at Goodrich's Motion to Allow $2.2MM Claim--------------------------------------------------------------As previously reported in the Troubled Company Reporter on May 13,2005, Goodrich asked the U.S. Bankruptcy Court for the SouthernDistrict of Indiana to allow it a $2,242,380 administrativeexpense claim for the value of the spare wheels and brakes andcash benefits it has provided to ATA Airlines with respect toaircraft that the Debtor has determined it no longer requires.

Debtors Object

Goodrich Corporation and ATA Airlines, Inc., are parties to aWheel and Brake Service and Purchase Agreement, dated as ofJune 23, 2000.

Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis,Indiana, tells Judge Lorch that the Wheel and Brake Service andPurchase Agreement, dated as of June 23, 2000, between GoodrichCorporation and ATA Airlines, Inc., has not expired. Goodrichcontinues to provide services; ATA is current in its postpetitionpayments for goods and services purchased under the Agreement.The Wheel & Brake Agreement has not been assumed or rejected underSection 365 of the Bankruptcy Code.

Ms. Hall notes that, with absolutely no explanation as to how itarrived at the amount, Goodrich asserts an administrative expenseclaim and demands immediate payment of $2,242,380 under Sections503 and 507.

Ms. Hall points out that even if ATA Airlines agrees to repayGoodrich for prepetition amounts due, ATA Airlines is under noobligation to pay those amounts immediately and certainly not asadministrative expense.

"It is completely unsupported in the law to award anadministrative claim and to order payment that essentiallyreimburses Goodrich for prepetition services provided under anexecutory contract and not for any postpetition benefitsconferred," Ms. Hall says.

Ms. Hall also argues that Goodrich fails to consider the impact ofSection 365 in the time between the Petition Date and theassumption or rejection of the contract. The court in In re Pub.Serv. Co. of N.H., 884 F.2d 11, 14 (1st Cir.1989), held that anexecutory contract generally remains in effect pending assumptionor rejection by the debtor. The courts in Krafsur v. UOP (In reEl PasoRefinery, L.P.), 196 B.R. 58, 72 (Bankr.W.D.Tex.1996) andin In re National Steel Corp., 316 B.R. at 305, held that the non-debtor party must continue to perform under the contact prior toassumption or rejection, but the debtor is not bound by theprovisions of the executory contract unless the contract issubsequently assumed.

According to Ms. Hall, Goodrich has not asserted a validadministrative expense claim. The non-debtor is entitled to anadministrative expense claim for any postpetition servicesbeneficial to the estates. Moreover, ATA is current in paying itspostpetition obligations.

Assuming that Goodrich could assert a claim based upon the termsof the Agreement, Ms. Hall contends that Goodrich still fails bothprongs of the Seventh Circuit's two-part test to determine whethera claim should be granted administrative priority. Under thetest, the claim will be afforded Section 503 priority if the debtboth:

(1) arises from a transaction with the debtor; and

(2) is beneficial to the debtor in the operation of the business.

Goodrich asserts that it has "provided a postpetition benefit tothe estate in the amount of the value of the spare wheels andbrakes and cash benefits it has provided to ATA with respect toaircraft that ATA has determined it no longer requires."

However, Ms. Hall says those equipments and cash benefits inconnection with the rejected aircraft were provided prior to thePetition Date. Hence, the claim asserted by Goodrich arises froma prepetition contract with ATA.

Goodrich attempts to argue that the "actual and necessaryexpenses" may include "costs ordinarily incident to operation of abusiness" and cites Reading Company v. Brown, 391 U.S. 471, 483-84(1968) for this proposition.

In the Reading Case, the Supreme Court ruled that a companyoperating in bankruptcy that commits a tort is responsible for thedamages and that tort claims will not be subordinated ordisallowed as being not necessary to the preservation of theestate.

Ms. Hall tells Judge Lorch that the Reading Case has nothing to dowith a contract party asserting an administrative claim as analleged right for reimbursement of certain prepetition paymentsunder an executory contract.

"Goodrich was not an innocent bystander injured by ATA'snegligence. Goodrich occupies the same position as hundreds ofothers of ATA's creditors and is merely seeking to recover on aclaim based upon a prepetition executory contract that has neitherbeen assumed or rejected."

The Official Committee of Unsecured Creditors supports theDebtors' argument.

Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATAHoldings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) andone of the nation's largest low-fare carriers. ATA has one of theyoungest, most fuel-efficient fleets among the major carriers,featuring the new Boeing 737-800 and 757-300 aircraft. Theairline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over40 business and vacation destinations. Stock of parent company,ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. TheCompany and its debtor-affiliates filed for chapter 11 protectionon Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,represents the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they listed$745,159,000 in total assets and $940,521,000 in total debts.(ATA Airlines Bankruptcy News, Issue No. 26; Bankruptcy Creditors'Service, Inc., 215/945-7000)

AVADO BRANDS: Administrative Claims Must Be Filed by July 8-----------------------------------------------------------The United States Bankruptcy Court for the Northern District ofTexas, Dallas Division, set July 8, 2005, as the deadline for allcreditors owed money on account of administrative claims arisingafter February 4, 2004, against Avado Brands, Inc., to file proofsof claim.

Creditors must file written proofs of claim on or before theJuly 8 Administrative Claims Bar Date and those forms must be senteither by first class mail, overnight delivery or personal serviceto the Clerk of Court, U.S. Bankruptcy Court for the NorthernDistrict of Texas, United States Courthouse, 1100 Commerce Streetlocated in Dallas, Texas. Copies must be sent to:

The company recently filed an amended 10-K/A annual report for thefiscal year ended June 30, 2003. The company's auditor hascompleted the audit of the annual financial statement for theperiod ending June 30, 2004. The company expects to be able tofile the 2004 annual report in July 2005, followed by thequarterly reports for fiscal 2005, and to be able to timely fileits fiscal 2005 annual financial statement in September 2005.

Upon regaining currency in its financial reporting, the companyintends to apply for resumption of quotation of its stock on theOTC Bulletin Board.

Dr. Pierce Carson, CEO, stated, "Bringing the financial reportscurrent is an important element in management's plan to place thecompany on an improved financial footing. Other elements of theplan include raising of interim funding, restructuring of debtwith secured creditors and arrangement of $4.0-$6.0 million fordevelopment of our mica and gold projects."

The company has provided for interim financing of its activitiesby selling mica, on a limited basis, to key customers in theplastics and cosmetic industries, and by selling its common stockto accredited investors in private placements.

Dr. Carson said the company has received verbal, non-bindingexpressions of interest for a larger project financing once itbecomes compliant in the filing of its financial statements andits stock resumes trading on the OTC Bulletin Board. He stated,"If we are able to continue to secure interim financing,restructure debt and in 2005 obtain the additional requiredproject financing, we believe that in 2006 the company could be ina position to begin profitable mining operations."

The company announced also that a long-term supportiveshareholder, a Swiss-based industrialist, recently had increasedhis stake in the company to more than 10 percent. Two insidersalso hold more than 10 percent of the company's stock. Therespective shareholdings were disclosed in Section 13-G and 13-Dfilings.

Going Concern Doubt

In its Form 10-K for the year ended June 30, 2003, the Companyreported that it:

These factors raise substantial doubt about the Company's abilityto continue as a going concern.

Defaults

In September 2001, Azco received a one-year $200,000 loan,currently bearing interest at 12% per annum, from a sophisticatedinvestor and shareholder, Luis Barrenchea. In connection withthis loan, Azco issued a warrant to purchase 250,000 shares ofAzco's common stock at $.40 per share. In September 2002, theloan was restructured and was payable in September 2003. Itcurrently is in default. The warrant vested in November 2001 andwas exercisable through September 4, 2003.

In October 2001, Azco received a one-year $100,000 loan, bearinginterest at 12% per annum, from Mr. Barrenchea. In connectionwith this loan, Azco issued a warrant to purchase 125,000 sharesof Azco's common stock at $.40 per share. In October 2002, theloan was restructured and was payable in October 2003. Itcurrently is in default. The warrant vested in December 2001 andwas exercisable through October 19, 2003.

In December 2001, Azco received a one-year $100,000 loan, bearinginterest at 12% per annum, from Mr. Barrenchea. In connectionwith this loan, Azco issued a warrant to purchase 125,000 sharesof Azco's common stock at $.40 per share. In December 2002, theloan was restructured and was payable in December 2003. Itcurrently is in default. The warrant vested in February 2002 andwas exercisable through December 3, 2003.

In March 2001, Lawrence G. Olson, Azco's Chairman and formerPresident and CEO, jointly with his wife, made an unsecured loanto Azco in the amount of $800,000 at an interest rate equal to theprime rate of interest as reported by Imperial Bank plus onepercentage point.

In conjunction with the loan, Mr. Olson received a warrant topurchase 300,000 shares of common stock for $0.70 per share. InOctober 2001, Azco restructured the $800,000 loan agreement withMr. Olson. Mr. Olson agreed to extend the note payable onMarch 15, 2003, in consideration for 700,000 warrants to purchasecommon stock at an exercise price of $0.40 per share. Thewarrants vested in December 2001 and expired in October 2003.

In addition, effective October 1, 2001, the interest rate payableon the $800,000 Olson loan was adjusted from prime plus 1% to 12%annually. In June 2002, the loan was extended an additional yearand Azco entered into a security agreement with Mr. Olson, wherebyAzco's assets secured the loan. The loan became payable in March2004 and currently is in default.

The Company plans to negotiate a restructuring of the four loans,totaling $1.2 million, in conjunction with the procurement of themica project financing if and when it becomes available.

Accountant Disagreements

On September 5, 2003, PricewaterhouseCoopers LLP resigned as theindependent registered public accounting firm for the Company. Inconnection with its audits for the fiscal years ending June 30,2002, and June 30, 2001, and through September 5, 2003, there wereno disagreements with PwC on any matter of accounting principlesor practices, financial statement disclosure, or auditing scope orprocedures, which disagreements if not resolved to thesatisfaction of PwC, would have caused them to make referencethereto in their reports on the financial statements for suchyears.

On October 24, 2003 the Company engaged James E. Raftery,Certified Public Accountant PC, located at 606 North StapleyDrive, Mesa, AZ 85203, as the independent registered publicaccounting firm to audit the Company's financial statements.

However, Mr. Raftery was unable to issue an audit report for theCompany, for the period ended June 30, 2003, and consequently, onFebruary 13, 2004, he resigned as the independent registeredpublic accounting firm for the Company. Mr. Raftery was unable toissue an audit report due to the fact that, as of the date of hisresignation, he had not received the final approval expected fromthe Public Accounting Oversight Board to audit publicly tradedcompanies. Regulations issued pursuant to the Sarbanes-Oxley Actprovide that on or after October 22, 2003, only accounting firmsapproved by the PCAOB may issue audit reports with respect topublicly traded companies.

Azco Mining Inc. is a U.S.- based mining and explorationenterprise with an emphasis on gold, copper and industrialminerals. Azco owns mineral lease rights to 90 square miles atthe Ortiz gold property in New Mexico, where previous explorationhas identified resources containing 2 million ounces of gold.Azco also owns and operates the Black Canyon mica deposit inArizona, which contains a large resource of mica and byproductfeldspathic sand.

B&A CONSTRUCTION: Creditors Must File Proofs of Claim by Aug. 5---------------------------------------------------------------The U.S. Bankruptcy Court for the Northern District of Georgia,Gainesville Division, set Aug. 5, 2005, as the deadline for allcreditors owed money by B&A Construction Co., Inc., on account ofclaims arising prior to Feb. 18, 2005, to file formal writtenproofs of claim.

Leverage now provides a cushion in the rating to support ongoingacquisitions and/or a potential resolution to lawsuits surroundingthe company's alleged involvement in the abuse of prisoners inIraq of up to 3.5x operating lease-adjusted debt to EBITDA. Thecorporate credit and senior secured ratings are affirmed at 'BB'.

The ratings reflect the company's second-tier presence in a highlycompetitive and consolidating market, as well as its acquisitivegrowth strategy. A predictable revenue stream based on a strongbacklog, the expectation that government-related business willremain substantial over the intermediate term, and a moderatefinancial profile for the rating are partial offsets to thesefactors.

CACI is a provider of information technology services andcommunications solutions, primarily to the federal government.The company had approximately $457 million in operating lease-adjusted debt as of March 2005.

Continued consolidation within the government IT services industryhas left CACI facing larger competitors with greater financialresources and broader technical capabilities as the companycompetes for new contracts. While CACI continues to expand itsbusiness, its ability to maintain its historically strongrecompete success rate (approximately 95% since 1997) will beimportant as it faces an increasingly competitive biddingenvironment. A strong backlog, about $3.4 billion as of June2004, offers a predictable source of revenue over the near tointermediate term.

CAESARS ENT: Merger With Harrah's Cues Fitch to Lift Ratings------------------------------------------------------------Fitch Ratings has affirmed the long-term debt ratings of Harrah'sOperating Co., a wholly owned operating subsidiary of Harrah's,Entertainment (NYSE: HET) and assigned a 'BBB-' rating to the new$4 billion revolving credit facility due in April 2009.

At the same time, Fitch has resolved the Positive Rating Watchstatus on the senior unsecured and subordinated debt ratings ofCaesars Entertainment (CZR) with respective upgrades to 'BBB-' and'BB+'. The rating action follows completion of Harrah'sacquisition of CZR on June 13, 2005.

With closing of the CZR acquisition, CZR has been merged into HOC,a wholly owned operating subsidiary of HET, where virtually allthe debt and assets reside. Pre-existing debt in the structurecurrently benefits from a holding company guarantee, and as perthe governing indentures, allows HET to file consolidatedfinancial statements as a proxy for HOC. HET is currentlysoliciting consents from CZR bondholders to also allow HET to fileat the parent level, and in exchange will provide CZR debt withthe parental guarantee. Fitch believes this to be a technicalissue that CZR bondholders will acquiesce to. However, in theevent that CZR public debt holders do not consent, the debt willnot be guaranteed.

Fitch finds the resulting structural subordination of CZR notesnot meaningful given the very limited risk that HET would notsupport the CZR debt ratably, and the fact that there arevirtually no assets at the holding company level. As such,regardless of the outcome of the consent offer (which should beresolved in the next few weeks), CZR ratings will be equalizedwith those of HOC.

Strategically, the acquisition allows HET to establish a strongerpresence on the Las Vegas Strip and reduces exposure to the morevolatile regulatory environments of regional riverboat markets.

While HET had expressed interest in building or buying discreteproperty on the Strip, the purchase allows HET to immediately takeadvantage of currently strong Las Vegas fundamentals in a moremeaningful way. CZR's Las Vegas portfolio should also allow HETto capture Total Rewards members who are bypassing Harrah'scurrent offerings in Las Vegas in favor of alternative properties.

Caesars' four prominent Strip properties include Caesars, Paris,Bally's, and Flamingo, which are situated at one of the busiestintersections at the center of the Strip. In addition, HET shouldbe able to improve same store sales and efficiency at CZRproperties by implementing its industry-leading player trackingsystems and loyalty programs. Returns on CZR's heavy capitalinvestment program over the past several years have beendisappointing and the upside exists in better asset utilization.

HET financed the cash portion of the CZR acquisition($1.9 billion) with borrowings under its revolving creditfacility, increasing pro forma leverage to 4.3 times (x) atclosing. Fitch expects Harrah's to end 2005 with pro formaleverage of approximately 4.2x, versus actual 2004 leverage of4.3x (which includes just six months of Horseshoe results).

Heavy capital expenditure plans in the range of $1.5 billionshould preclude significant debt reduction in 2005. However, ananticipated drop-off in spending in 2006 and a full-year of CZRresults should produce ample free cash flow for the company todeliver to levels appropriate for the rating (below 4.0x) by theend of 2006.

While closing leverage is high for the rating category, Fitchnotes that this is consistent with Harrah's historical capitalstructure policies with rapid improvement in leverage followingacquisition-related debt increases. With revolver capacityupsized to $4 billion at closing, liquidity remains solid, withroughly $2 billion remaining in available funds. Based on currentprojections, cash from operations combined with revolveravailability and cash-on-hand appear adequate to support thecompany's growth initiatives, meet debt maturities, and paydividends through at least year-end 2006.

Ongoing risks include the potential for further run-up in leveragedue to future acquisitions or development opportunities, potentialregulatory changes and/or tax increases (particularly in riverboatjurisdictions), and competitive threats to Illinois, AtlanticCity, and northern Nevada. As Harrah's largest acquisition todate, integration risks remain a key concern.

The Stable Rating Outlook reflects Fitch's expectation thatHarrah's will improve credit metrics to levels more appropriatefor the credit within 18 months of closing. The rating(s) andOutlook would be adversely affected if HET is unable to reducedebt in a timely manner or chooses to pursue additional large-scale debt-financed acquisitions, growth projects, and/or sharerepurchases.

Proceeds from the issue will be used to redeem in full its HighTides III preferred securities. The company will use theremaining net proceeds to repurchase a portion of the outstandingprincipal amount of its 8.5% senior unsecured notes due 2011.

The outlook is negative. The San Jose, California-based company,which develops, acquires, owns, and operates power generationfacilities, has about $18 billion of total debt outstanding.

"The ratings on Calpine reflect the company's reliance on assetsales and contract monetizations to meet its interest payments andother fixed obligations in 2005 and 2006," said Standard & Poor'scredit analyst Jeffrey Wolinsky.

In addition, Calpine faces uncertain prospects for improvements inpower markets, making it unlikely that Calpine will be able tomeet these obligations with internal cash flow generation.

The Debtor is under the control of LePetomane XII, Inc., a federalReceiver appointed by the Honorable Judge Robert W. Gettleman ofthe U.S. District Court for the Northern District of Illinois.

In Jan. 2005, LePetomane auctioned the largest assets of theDebtor, a $2.5 billion [sic.] portfolio of consumer accounts, for$6.8 million plus other consideration.

The Receivership Court approved LePetomane's sale of the Debtor'sportfolio of consumer accounts. The Debtor's business operationshad ceased and its main asset had been liquidated into cash.

Mr. Welland asserts that he holds a $6.2 million claim against theDebtor. He also acquired other claims in the Receivership Casefor $350,000 and $640,000. In the Bankruptcy Case, Mr. Wellandacquired the claims of the Petitioning Creditors:

The total amount of Mr. Welland's claim against the Debtor is$10,056,908.

LePetomane estimated that the total amount of claims existingagainst the Debtor range between $12 million to $18 million. Ifthe total claim amount is $18 million, then Mr. Welland owns orcontrols 60% of all claims. If the total claim amount is$12 million, then Mr. Welland's percentage of ownership is as highas 85%.

(a) The four Petitioning Creditors have sold their claims and do not wish to continue to prosecute the Involuntary Chapter 11 Case;

(b) Mr. Welland, as assignee of the Petitioning Creditors, does not wish to prosecute the Involuntary Chapter 11 Case;

(c) Mr. Welland owns at least the majority and probably an overwhelming amount of the debt of the Debtor and does not wish the bankruptcy case to proceed;

(d) Mr. Welland holds a security interest on the assets of the Debtor leaving no equity for any other creditor;

(e) Under the terms of the Stipulated Preliminary Injunction entered in the Receivership Case, the Debtor's officers and directors are unable to perform the functions and duties of a debtor-in-possession in the Involuntary Case;

(f) With the Receiver's closure of the Debtor's business and the sale of the Debtor's main assets in the form of the portfolio of consumer accounts, there is no business or assets left to reorganize for the benefit of creditors, thereby frustrating the purpose of a Chapter 11 case; and

(g) A liquidation of the Debtor's remaining assets and a distribution of the proceeds of the liquidation of its assets can be accomplished as quickly and efficiently in the Receivership Case as in the Chapter 11 case.

The Honorable Judge Pamela Hollis set the hearing to consider Mr.Welland's request at 10:30 a.m. on July 7, 2005, in Courtroom 644,219 South Dearborn Street located in Chicago, Illinois.

The closure of this facility is a continuation of the previouslyannounced initiative to right-size operations to better utilizecapacity and achieve greater cost efficiencies. Associated withthis closure, Caraustar will incur total costs of approximately$1.9 million. Of the total costs, $800,000 will be arestructuring charge consisting of severance and other contractualobligations. The remaining $1.1 million will be cash costs thatconsists of fixed asset impairment and equipment relocation costsand will be expensed over the remainder of 2005. Therationalization of this facility is expected to generate annualpre-tax savings of approximately $1.2 million.

This facility will continue to operate until July 15, 2005 tofacilitate customer transition, at which time customers will beserved by other Caraustar operations. Approximately 70 salariedand hourly employees will be affected by this closure. Caraustarwill provide these employees with a separation program includingseverance pay, benefits continuation and job placement assistance.

As reported in the Troubled Company Reporter on May 11, 2005,Standard & Poor's Ratings Services lowered its ratings on recycledpaperboard producer, Caraustar Industries Inc., including itscorporate credit rating, to 'B+' from 'BB-', and its seniorsecured bank loan rating, to 'BB-' from 'BB'. The outlook isstable.

The downgrade reflects Austell, Georgia-based Caraustar'spersistent subpar credit metrics because of weak earnings and itsaggressive capital structure. Total debt, including capitalizedoperating leases, at March 31, 2005, was $550 million, with debtto EBITDA of 9x.

"Despite noticeably improved industry capacity utilization rates,the potential for modestly higher prices, and ongoing cost-savingsefforts, we do not foresee sufficient improvement in Caraustar'sfinancial performance to maintain the former ratings," saidStandard & Poor's credit analyst Pamela Rice. "Caraustar'searnings should improve in 2005, resulting in credit protectionmeasures more in line for the current ratings. The outlook couldbe revised to negative if market conditions worsen, if the companyis unable to realize sufficient benefits from its cost reductionefforts, or if it is unable to raise selling prices to at leastoffset rising raw-material costs. Caraustar's business profilecould support a slightly higher rating; however, a positiveoutlook is unlikely to occur unless the company successfullyaddresses is highly leveraged capital structure."

"We believe that the company will benefit from its efforts toreduce costs and centralize procurement, but realization of itsrecently announced price increase is necessary to avoid furthermargin compression," Ms Rice said.

CAROLINA TOBACCO: Hires Cline Williams as Litigation Counsel------------------------------------------------------------Carolina Tobacco Company sought and obtained permission from theU.S. Bankruptcy Court for the District of Oregon to retain Cline,Williams, Wright, Johnson & Oldfather, LLP, as its litigationcounsel.

In particular, Cline Williams will represent the Debtor againstMary Jane Egr [Lancaster County District Court for the State ofNebraska Case Nos. C103-3378 and C104-2261].

Cline Williams will prepare and file all documents necessary tostay the cases and take all necessary actions against Mary JaneEgr.

The lead attorneys at Cline Williams who will represent the Debtorand their current hourly billing rates are:

CAROLINA TOBACCO: Edward Hostmann Approved as Financial Advisor---------------------------------------------------------------The U.S. Bankruptcy Court for the District of Oregon gave CarolinaTobacco Company permission to employ Edward Hostmann, Inc., as itsfinancial advisor during its bankruptcy proceeding.

Edward Hostmann will:

a) prepare a budget as requested by the States [sic];

b) assist the Debtor in preparing projections for dealing with escrow deficiencies; and

c) prepare other necessary financial matters as the Debtor will request.

The Debtor paid Edward Hostmann a $50,000 retainer. Theprofessionals who will provide financial-related services to theDebtor and their current hourly billing rates are:

CATHOLIC CHURCH: Spokane Wants to Hire BMC Group as Claims Agent----------------------------------------------------------------Due to the need for confidentiality of certain proofs of claim andthe need for publication of the claims bar date notice, theDiocese of Spokane seeks authority from the U.S. Bankruptcy Courtfor the Eastern District of Washington to employ BMC Group, Inc.,to develop notice procedures for the Claims Bar Date and assistthe Diocese in administering the claims.

BMC specializes in providing comprehensive consulting andbankruptcy data management services to Chapter 11 debtors tostreamline and manage the administrative burdens imposed on them.BMC's services include, but are not limited to, claims receipt andrecordation, acting as information agent, reconciliation of claimsas well as administration of plan of reorganization votes anddistributions under the plan of reorganization. BMC hasexperience in developing claims notice procedures andadministering claims process in cases similar to the Diocese'scase, including the bankruptcy of the Archdiocese of Portland inOregon.

As Spokane's Claims Agent, BMC will:

(a) assist Spokane and the Office of the Clerk of the Bankruptcy Court with noticing and tort claims docketing;

(b) prepare and serve the notices required in the bankruptcy case as requested by the Diocese;

(c) receive, record, and maintain copies of all proofs of claim and proofs of interests filed in the Chapter 11 case;

(d) create and maintain the official claims register;

(e) receive and record all transfers of claims;

(f) maintain an up-to-date mailing list for all entities who have filed proofs of claim or requests for notices in the bankruptcy case;

(g) assist Spokane with the administrative management, reconciliation, and resolution of claims;

(h) mail and tabulate ballots for purposes of plan voting;

(i) assist Spokane with the production of reports, exhibits and schedules of information of use by the Diocese or to be delivered to the Court, the Clerk's Office, the U.S. Trustee, or third parties;

(j) provide other technical and document management services of a similar nature requested by Spokane or the Clerk's office; and

(k) facilitate or perform distributions.

BMC will also provide computer software support, educate and trainthe Diocese in the use of the support software, provide standardreports, as well as consulting and programming support for theDiocese's requested reports, program modifications, databasemodification, and other features.

Spokane will pay BMC based on its hourly consulting fee, whichranges from $45 to $300. Spokane will also reimburse BMC for anynecessarily incurred out-of-pocket reasonable expenses. Traveltime will be billed at one-half of BMC's applicable hourly rate.

In connection with noticing and publication services, upon BMC'srequest, Spokane agrees to prepay BMC's estimated publication orpostage amounts with respect to each notice, or will authorize BMCto cause the courier's charges to be stated to Spokane's ownaccount with the courier.

BMC will invoice the Diocese for fees and expenses. If any amountis unpaid as of 30 days from the receipt of the invoice, Spokanewill pay a late charge, calculated as 1-1/2% interest on theamount paid, accruing from the invoice date. In case of a disputein the invoice amounts, notice will be given to BMC within 25 daysof receipt of the invoice by Spokane. Interest will not accrue onany amounts in dispute. The balance of the invoice amount is dueand payable in the normal course.

Tinamarie Feil, vice president of the BMC Group, assures JudgeWilliams that her firm does not hold or represent any interestadverse to the Diocese, and is "disinterested" within the meaningof Section 101(14) of the Bankruptcy Code.

CATHOLIC CHURCH: Tucson Wants to Assume Catholic Foundation Lease----------------------------------------------------------------- The Diocese of Tucson seeks authority from the U.S. BankruptcyCourt for the District of Arizona to assume a lease datedJune 30, 2003, with the Catholic Foundation for the Diocese ofTucson for the Pastoral Center building located at 111 SouthChurch Avenue in Tucson, Arizona.

The Diocese and the Catholic Foundation, an Arizona non-profitcorporation, are the only parties with an interest in the TripleNet Lease.

Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, inTucson, Arizona, relates that the Pastoral Center has recentlybeen renovated and houses substantially all of the Diocese'soperations. Furthermore, the Diocese is paying below market rent.Based on these and other factors, the Diocese believes thatassuming the lease is in the best interest of its operations,ministry, estate and creditors.

Mr. Nye says the Diocese has never defaulted under the Lease andemergence from Chapter 11 provides sufficient adequate assuranceof future performance. Accordingly, no cure is required for theassumption.

CHI-CHI'S: Wants to Pay $4.2 Million to Five Hepatitis A Victims----------------------------------------------------------------Chi-Chi's, Inc., asks the U.S. Bankruptcy Court for the Districtof Delaware for authority to pay five Hepatitis A claimants for anaggregate amount of $4,202,000.

The Hepatitis A outbreak at the Beaver Valley Chi-Chi's arose fromexposure to contaminated green onions. Despite the fact that onlyone of Chi-Chi's restaurant was involved, approximately 600customers and 13 employees contracted the disease. The number ofpositive Hepatitis A cases has been ascertained through medicalconfirmation and investigation protocol performed and verified bythe Pennsylvania Department of Health.

The settlement will be covered by the Debtors' insurance policies,which provide aggregate coverage of $51 million for the HepatitisA claims.

Headquartered in Irvine California, Chi-Chi's, Inc., is a director indirect operating subsidiary of Prandium and FRI-MRDCorporation and each engages in the restaurant business. TheDebtors filed for chapter 11 protection on October 8, 2003 (Bankr.Del. Case No. 03-13063-CGC). Bruce Grohsgal, Esq., Laura DavisJones, Esq., Rachel Lowy Werkheiser, Esq., and Sandra Gail McLamb,Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C.,represent the Debtors in their restructuring efforts. When theDebtor filed for bankruptcy, it estimated $50 to $100 million inassets and more than $100 million in liabilities.

In addition, Standard & Poor's assigned its 'BB-' rating and a '1'recovery rating to Chiquita Brands LLC's $375 million term loan Bdue 2012, indicating that lenders can expect full (100%) recoveryof principal in the event of a payment default.

Standard & Poor's has withdrawn all issue ratings assigned onMarch 28, 2005, but were not issued.

At the same time, Standard & Poor's affirmed its 'B+' corporatecredit rating on Chiquita Brands International.

The outlook is negative. The Cincinnati, Ohio-based fresh fruitand vegetable producer and distributor is expected to have about$1.1 billion in total debt outstanding at closing.

Proceeds from the new credit facilities and note issuance will beused to finance Chiquita's $855 million acquisition of the FreshExpress unit of Performance Food Group and for other generalcorporate purposes, including permitted acquisitions.

CII CARBON: Moody's Rates $270MM Senior Secured Term Loan at B1---------------------------------------------------------------Moody's Investors Service assigned a B1 rating to CII CarbonL.L.C.'s $220 million guaranteed senior secured Term Loan, a B1rating to its $50 million guaranteed senior secured revolver and aB1 Corporate Family Rating (previously called the Senior Implied).

This is the first time Moody's has rated CII.

Proceeds from the bank borrowings will be used to fund CII'spurchase of Venture Coke Company, a privately owned coke calciningjoint venture, and to refinance existing indebtedness. Theratings assume that the transaction will close in the amounts andalong the terms as presented to Moodys. The rating outlook isstable.

The B1 Corporate Family Rating (previously called the SeniorImplied) considers:

* CII's relatively small revenue base;

* increased leverage following the Venco acquisition;

* exposure to cyclical demand and production rates of the primary aluminum industry; and

* a relatively small number of both key suppliers for green coke raw material requirements and customers, i.e., aluminum smelters to which calcined coke is sold for use in the production of carbon anodes.

The rating is supported by:

* the relative stability of CII's revenues;

* its free cash flow generating ability, even during the down years for aluminum in 2001-2003;

* long-term relationships with customers as well as raw material suppliers; and

* ancillary revenues derived from energy sales.

In addition, CII's increased capacity (to 1.8 million tons),market share following completion of the Venco acquisition(roughly 17%, second largest global producer behind Great LakesCarbon) and slightly broader product offerings, with the abilityto serve the TiO2 market for calcined petroleum coke, arefavorable considerations in the rating. Importantly, theacquisition will also provide CII with a multi-year green cokesupply contract with a new supplier.

The stable outlook reflects Moody's view that while thisacquisition will result in increased financial leverage, thecurrent outlook for CII's end-use markets, principally calcinedcoke for carbon anode production for the aluminum smeltingindustry, should remain reasonably robust through 2006, allowingCII to utilize anticipated free cash flow to reduce debt. Asaluminum cannot be produced without calcined coke as part of thesmelting process, CII's performance is more sensitive to aluminumproduction levels rather than aluminum prices.

Aluminum production has grown every year since 2001 and Moody'sdoes not expect production levels to evidence significantcutbacks. As a result, CII's earnings and cash flow generationare expected to show relative stability over time. Its ratingscould be upgraded should the company maintain leverage, asmeasured by the debt/EBITDA ratio, at less than 3.5x. Ratingscould be downgraded if leverage were to increase from existinglevels or should free cash flow turn consistently negative.

CII is a leading producer of calcined coke, the key raw materialrequired for the production of carbon anodes used in theelectrochemical aluminum smelting process with a consumption rateof approximately 0.4 pounds of anode grade calcined coke to eachpound of primary aluminum produced. Green coke, a petroleumrefining by-product, represents approximately 70% of the cost ofmaking calcined coke, with raw material costs and selling pricestending to move in tandem. There is no known economic substitutefor anode grade calcined coke.

The company is relatively small with acquisition adjusted pro-forma revenues of $326 million for the LTM period ending June 30,2005. Leverage following the acquisition will be between 3.75xand 4.5x as measured by the pro-forma debt to LTM EBITDA ratio.Given the current favorable industry operating conditions andstrategic benefits from the acquisition of Venco, Moody's expectsCII to be able to reduce leverage within a reasonable time frame.Although margin growth on the upside may be limited, relativelystable performance is expected, even during more difficultaluminum industry conditions, given the characteristics of thebusiness.

Moody's also considers that CII has a limited number of rawmaterial suppliers. Although the long term nature of theserelationships is important, any one would be difficult to replace.CII's customer concentration is also high; however, Moody'srecognizes the close relationship between CII and its customersgiven the stability and critical knowledge required to ensuretimely and quality supplies of calcined coke product.

Moody's expects that CII's results will continue to demonstraterelative stability in the near term. Current aluminum demandshould continue healthy and current calcined coke productionglobally is nearing capacity. Moody's note the market forcalcined coke is a global one, evidenced by the fact thatapproximately 83% of CII's production is exported, although thiswill decrease following the acquisition to around 55%. While theend market is global, the supplier base is local and CII'sproximity to refineries, which produce the green coke needed, is astrategic benefit to its business. CII's revenue base also gainsa degree of stability from the company's ability to sell steam andelectricity generated as waste heat in the calcining process tonearby industrial or electrical plants. Energy earnings representan important contribution to gross profit.

The B1 ratings on the guaranteed senior secured bank facilities,secured primarily by all assets of the company, reflect theirposition as the only financial debt component of the capitalstructure. The rating also reflects the limited collateral valueavailable in a distressed situation. The $220 million Term Loanamortizes quarterly. The bank facility also requires mandatoryprepayments from a portion of excess cash flows and containsfinancial covenants governing leverage and coverage ratios. Giventhe existing favorable industry conditions, Moody's expects CII tobe able to reduce debt by amounts greater than scheduledamortization over the next two years, thereby improving itsleverage position.

CII Carbon LLC, headquartered in New Orleans, Louisiana, is aleading producer of anode grade calcined coke for use in thealuminum production process.

Proceeds from the credit facility and cash balances will be usedby the New Orleans, Louisiana-based company to acquire unrated-Venture Coke Company, a joint venture between ConocoPhilips Co.and a private equity firm.

With this acquisition, CII, a relatively small company, willbecome the second-largest producer of calcined petroleum coke withthe capacity to produce 1.8 million tons, accounting forapproximately 17% of market share in the western hemisphere. Themajority of CII Carbon's CPC production is anode-grade and is soldto the aluminum industry as a key component in carbon anodes,which are used in the aluminum smelting process to producealuminum. The remaining capacity is used to produce industrial-grade CPC, to make titanium dioxide (widely used as a brilliantwhite pigment for paint, plastics, and paper) as well as in othernon-aluminum applications.

"CII benefits from its good position in a niche industry. Long-term customer and supplier relationships, relatively stablespreads between raw petroleum coke and CPC, lack of productsubstitution for CPC, and cash flow derived from its energy sales,support the ratings," said Standard & Poor's credit analystKenneth Farer. "However, given its leverage position, CII stillremains vulnerable to the volatile and cyclical aluminum industry,new low-cost CPC capacity and supplier concentration."

Mr. Farer added, "We do not expect a significant decline in thealuminum industry over the intermediate term, which should allowfor some debt reduction. The outlook could be revised to negativeif aluminum production declines significantly or new capacityreduces CPC prices or CII's market share. An outlook revision topositive could occur if the company commits to a very conservativefinancial policy and profile."

CII Carbon's $270 million senior secured bank facility will becomprised of a $50 million revolving credit facility, whichmatures in 2010, and a $220 million term loan, which matures in2012. The term loan has quarterly reductions, which total $2.2million per year. The remaining balance of approximately $205million will be due in 2012. The rating on the bank facility isbased on preliminary terms and conditions.

The borrower under the bank facility is CII Carbon, and CIICarbon's current and future subsidiaries guarantee the borrowingsunder the bank facility. The bank facility is secured by first-priority, perfected liens on substantially all current and futuretangible and intangible assets of the company and its capitalstock. Future fixed-energy assets may be pledged as collateral tofinance the acquisition of the assets.

CIMAREX ENERGY: S&P Rates $320 Million Senior Notes at B+---------------------------------------------------------Standard & Poor's Ratings Services assigned its 'BB-' corporatecredit rating to Cimarex Energy Co. At the same time, Standard &Poor's assigned its 'B+' senior unsecured debt rating to the$195 million senior notes due 2012 and $125 million senior notesdue 2023 being assumed from the acquisition of Magnum HunterResources Inc. The outlook is stable.

Denver, Colorado-based Cimarex has roughly $544 million of debt.

"The ratings on Cimarex reflect risks associated with theacquisition of Magnum Hunter, which more than doubles Cimarex'ssize and a somewhat higher-than-average cost structure for thecombined entity relative to peers," said Standard & Poor's creditanalyst Paul B. Harvey. "Somewhat mitigating these concerns are arecord of good execution by management, a sizable onshore reservebase, relatively conservative reserve accounting, a commitment tomaintaining low debt leverage, and a focus on growth through thedrillbit," he continued.

The stable outlook reflects expectations of near-term debtrepayment and the successful integration of Magnum Hunter intoCimarex, mitigated by potentially volatile earnings due toCimarex's lack of hedging and a high cost structure.

Positive rating actions are possible, if Cimarex can lower itscost structure, successfully manage the integration of MagnumHunter, and reduce debt on a per boe basis to allow it to betterperform in a midcycle pricing environment. However, if Cimarexpursues additional acquisitions, causing the company to incursignificant additional debt (which Standard & Poor's currentlyviews as unlikely) the outlook could be revised to negative.

As of the May distribution date, the CE levels for all classesfrom series 2004-1 and 2004-HYB1 have increased modestly sinceorigination. There are currently no loans in series 2004-1 thatare 90 plus delinquent (including bankruptcies, foreclosures, andreal estate owned), 47% of the collateral has paid down, and therehave been no losses.

In series 2004-HYB1, there are six loans, totaling $3,162,667, inforeclose and real estate owned. However, Fitch believes that thenon-rated B-6 class will absorb any losses that result from thefuture liquidation of these loans and, thus, these delinquentloans do not present a credit risk to the rated classes of thetransaction. As of the May distribution, 46% of the collateralhas paid down, and there have been no losses.

The collateral for series 2004-1 consists of conventional, fixed-rate seasoned mortgage loans secured by first liens on one- tofour-family residential properties. The collateral for series2004-HYB1 consists of conventional, adjustable-rate mortgage loanssecured by first liens on one- to four-family residentialproperties.

At the same time, ratings were removed from CreditWatch where theywere placed with negative implications on April 28, 2005. TheCreditWatch listings followed the company's confirmation that itwas part of a consortium considering a potential takeover ofAllied Domecq PLC (BBB+/Watch Neg/A-2). The ratings affirmationand removal from CreditWatch follows Constellation's recentannouncement that it is no longer planning to pursue an offer forAllied Domecq.

The outlook is negative. At Feb. 28, 2005, Fairport, New York-based Constellation had about $3.29 billion of total debtoutstanding.

Fitch does not rate the $17.3 million class P or $14.7 millionclass RCKB certificates.

The upgrades are due to an increase in credit enhancement and thepool's stable performance since issuance. As of the June 2005distribution date, the pool's aggregate certificate balance hasdecreased 2.4%, to $982 million from $1 billion at issuance. Todate, there have been no loan payoffs or losses.

The largest loan in the pool, Great Lakes Crossing (8.63%)maintains an investment grade credit assessment. The servicer'syear-end 2004 reported net operating income increased 8.5% versusYE 2003 NOI. Occupancy at the 1.14 million square foot retailcenter declined slightly to 90% from 91% during 2004.

Currently, there are two loans totaling 0.69% in specialservicing. Fitch does not expect losses on either speciallyserviced loan. The largest specially serviced loan (0.55%) is a224-unit multifamily property in Arlington, TX, and is currently60 days delinquent. The borrower is currently paying delinquentdebt service payments following the end of a forbearanceagreement. Once the loan's status becomes current in itspayments, the special servicer expects to transfer the loan backto the master servicer.

CREDIT SUISSE: Moody's Rates Class B-2 Sub. Certificates at Ba2---------------------------------------------------------------Moody's Investors Service assigned an Aaa rating to the seniorcertificates issued by Credit Suisse First Boston MortgageSecurities Corp. and ratings ranging from Aa1 to Ba2 to themezzanine and subordinate certificates in the deal.

The securitization is backed by fixed-rate, conventional, fullyamortizing and balloon, primarily second lien residential mortgageloans with original terms to stated maturity of up to 30 years.The loans were originated by various originators and acquired byDLJ Mortgage Capital, Inc.

According to Michael Labuskes, Associate Analyst, "The ratings arebased primarily on the credit quality of the loans, and on theprotection from subordination, overcollateralization, and excessspread."

Wilshire Credit Corporation will service the loans. Moody's hasassigned to Wilshire Credit Corporation its SQ2 servicer qualityrating as a primary servicer of second lien loans.

CSC HOLDINGS: Moody's Reviews B1 Rating of $4.2 Bil. Unsec. Notes-----------------------------------------------------------------Moody's Investors Service placed all ratings for CablevisionSystems Corporation and CSC Holdings, Inc., a wholly ownedsubsidiary of CVC, on review for downgrade following the Dolanfamily's announcement of a proposal to acquire Cablevision's cableassets. Under the proposed transaction, credit metrics woulddeteriorate meaningfully as debt of the cable operations wouldincrease to approximately 9 times EBITDA from just under 6 timesrange.

The proposed transaction includes the spin off of the assets ofRainbow Media Holdings to all Cablevision shareholders on a prorata basis. In a separate press release, Moody's expanded thereview for upgrade of ratings on the debt at Rainbow NationalServices LLC.

Moody's will evaluate the likely effect of the proposed financing,specifically the increase in leverage and the composition of thedebt. Moody's estimates debt will increase to approximately 9.1times EBITDA pro forma for the transaction and based on estimated2005 EBITDA, from approximately 5.8 times (based on estimated June2005 cable debt and estimated 12 months EBITDA through June 30,2005). In analyzing Cablevision's cable operations, Moody'sfocuses on the debt currently called Restricted Group debt and thebonds at CVC; cash flow from the consumer and business (Lightpath)cable assets service this debt.

The extent of the likely downgrade (potentially one notch or two)is unclear at this time. Notwithstanding this substantialincrease in leverage, the proposed transaction simplifies theorganization and would allow management to focus on the cableoperations free from numerous distractions which have to datenegatively impacted the rating. Moody's may conclude the reviewprior to the close of the transaction as the size and structure ofthe financing and its effect on Cablevision becomes clear.

Cablevision Systems Corporation, through its wholly ownedsubsidiary CSC Holdings, Inc., is a top-ten domestic paytelevision service provider serving approximately 3 million cablesubscribers in and around the New York metropolitan area. Thecompany maintains its headquarters in Bethpage, New York.

Fitch does not rate the $9.7 million class C certificates. Theclass A1-A, A1-B, and A-2 certificates have paid in full.

The rating upgrade is due to the increase in subordination levelsresulting from loan payoffs and amortization. As of the June 2005distribution date, the pool has paid down 76.5% to $119.5 millionfrom $508.6 million at issuance.

Two loans (6.7%) are currently in special servicing: one loan thatis 90+ days delinquent (5.7%) and one loan that is current (1%).The 90+ day delinquent loan is secured by a multifamily propertylocated in Dallas, Texas. The special servicer is pursuingforeclosure and losses are expected. The other specially servicedloan is pending return to the master servicer.

In addition to the specially serviced loans, eight loans (27.7%)are considered Fitch Loans of Concern due to decreases in debtservice coverage ratio, occupancy, or other performance issues.These loans' higher likelihood of default was incorporated intoFitch's analysis. The largest of these loans (13.6%) is securedby a retail property in Arcadia, CA. This property has seen asharp drop in occupancy since issuance due to a tenant vacating30% of the net rentable area in April 2003. Half of this spaceremains vacant.

* the company's ongoing depressed cash flow in relation to a relatively high level of debt;

* margin pressure from higher fiber, energy, and chemicals costs;

* the negative impact of the strong Canadian dollar; and

* Moody's expectation that there will be a persistent supply/demand imbalance in the company's key North American uncoated woodfree paper market that will likely inhibit a restoration of cash flow and credit metrics to levels that can support a Baa3 rating over the near to intermediate term.

This concludes a ratings review initiated on 10 May 2005.

Ratings downgraded:

* Senior Unsecured: to Ba2 from Baa3

* Senior Unsecured Shelf: to (P)Ba2 from (P)Baa3

Rating assigned:

* Corporate Family Rating (formerly known as the Senior Implied Rating): Ba2

Outlook restored:

* Stable

The rating downgrade to Ba2 was influenced by two key factors.Firstly, owing to gradually declining North American demand and anexcess of installed production capacity, there is a persistentsupply/demand imbalance in the company's key North Americanuncoated woodfree paper market. This has adversely affected paperprices, and despite anticipated supply management activities, islikely to continue to do so for the foreseeable future. Secondly,the entire spectrum of paper making companies is adverselyaffected by elevated prices for such key inputs as fiber, energy,chemicals, and in many cases, post-retirement labor costs. Theseinfluences are not expected to materially abate over the near-to-mid term. This cost side influence adds to the margin pressurecreated by lower paper prices.

In Domtar's case, margin pressure is further augmented fromincreased input costs resulting from the past three year'sCanadian-to-American dollar exchange rate migration. The effectof these forces on Domtar's average through-the-cycle cash flow issufficient to warrant a ratings' downgrade. At the revised Ba2ratings level, the outlook is stable. As a matter of routine withthe downgrade to speculative grade, a senior implied rating hasbeen assigned; this is equal to the senior unsecured rating at Ba2

Domtar's Ba2 debt ratings result primarily from credit protectionmetrics that Moody's anticipates in light of relatively depressedoutput prices and elevated input costs. Moody's anticipates thatthe persistent supply/demand balance for the company's key output,uncoated woodfree papers, will continue for the foreseeablefuture. This will cause paper prices to be lower than wouldotherwise be expected for relatively favorable stages of thebusiness cycle.

Given the company's relative concentration in this space, withsome 80% of sales derived from the North American uncoatedwoodfree paper business, this is a particularly significantinfluence on the rating. As well, and while elevated input costsfor fiber, energy, chemicals and labor are likely to install ahigher price floor than existed in previous downturns, Moody'sexpects that cost input pressure is largely permanent, and will -- in concert with lower average through-the-cycle output prices --result in profit margins that are suppressed when compared toprevious cycles.

In Domtar's case, with some 50% of its assets located in Canada,the company is also exposed to risks that the Canadian dollar willappreciate relative to the American dollar, placing furtherpressure on margins. Further, with Domtar's debt level influencedby an earlier acquisition, credit protection measures are affectedcommensurately.

Domtar's dividend is also a relatively large proportion of theaverage level of profitability that Moody's anticipates, with thecash drain further augmenting negative pressure on certain cashflow based credit metrics. Domtar's generally good backwardsintegration into fiber supply and favorable manufacturing andlogistics/distribution efficiencies are one positive factor thatoffsets these adverse influences.

So too is the latent debt reduction potential provided by thecompany's ability to monetize assets such as the 50% interest inNorampac Inc., certain hydro electric facilities, lumberoperations and certain other non-core assets. While Moody'sexpects Domtar's credit metrics to lag those generally applicablefor a Ba2 rating, this debt reduction flexibility is a significantrisk mitigating factor that compensates for the expectedshortfall.

Domtar also has good liquidity arrangements and has arranged its'debt maturities so there is no near term potential of capitalmarkets related event risk adversely affecting access to capital.Lastly, Domtar has a significant market share with a relativelybroad product line in the North American uncoated woodfree papersmarket.

With all of Domtar's publicly traded debt ranking pari passu withits' bank credit facility, there is no need to notch any of thecompany's debt. Accordingly, the senior unsecured ratings areequal to the senior implied rating of Ba2. At the Ba2 ratinglevel, there is a balance of factors that could affect financialperformance and credit protection metrics. Accordingly, theoutlook is stable. Owing to the company's ratings beingdowngraded, a near-to-mid term positive revision in ratings oroutlook is unlikely.

However, were Domtar's cash flow generating capability to improvesuch that in Moody's view, the company could generate averagethrough-the-cycle RCF(Adj)/TD(Adj) approaching 15% with thecommensurate FCF(Adj)/TD(Adj) approaching 5% while retaining fullasset divestiture potential, a positive ratings action could betriggered.

Note that these figures account for standard Moody's financialstatement adjustments related to pension, recurring operatingleases and off-balance sheet accounts receivable programs, and donot correspond with reported figures. It should be also notedthat Moody's analysis anticipates the benefits of cost reductionprograms and recent asset portfolio restructuring.

Should these anticipated near-term benefits not be as large asanticipated, or alternatively, should Moody's view of Domtar'sability to generate average through-the-cycle credit protectionmetrics result in measures declining below 10% and 5% forRCF(Adj)/TD(Adj) and FCF(Adj)/TD(Adj) respectively, it is likelythat negative ratings' actions would result. A dramaticdeterioration in liquidity would also likely result in a negativeratings' action.

Headquartered in Montreal, Quebec, Domtar is a major NorthAmerican producer of:

Despite ongoing efforts to improve operating performance over thepast 12 months, debt levels and credit measures have not improvedto meet levels that were expected and incorporated into thecompany's existing ratings. Furthermore, the company has haddelays executing a planned IPO that was expected to helpdeleverage the company. (At this time, it is unclear if this eventwill occur in the near-to-intermediate term.)

Dresser designs and manufactures equipment for the energy industryand has total debt of about $1.075 billion.

"The CreditWatch listing will be resolved in the near term,pending the company completing its 2004 audit process and filingits 2004 Form 10K and first-quarter 2005 Form 10Q," said Standard& Poor's credit analyst Jeffrey B. Morrison. "If the company canfile statements in the near term and no additional developmentsoccur beyond management's previously announced restatements ofprevious accounting periods, it is unlikely that ratings would belowered further," he continued. However, if additional delays infiling persist beyond a reasonable time frame, negative ratingsactions could result.

ENRON CORP: Inks Stipulation Allowing Calpine's $52 Million Claim-----------------------------------------------------------------EPC Estate Services, Inc., formerly known as National EnergyProduction Corp., and Calpine Corporation, as successor-in-interest to Goldendale Energy, Inc., were parties to a certaincontract, dated February 13, 2001. Pursuant to the Contract,NEPCO was obligated to design, procure equipment and construct apower generation facility in Goldendale, Washington. Under aGuaranty Agreement, dated and effective February 5, 2001, EnronCorp. guarantied NEPCO's obligations under the Contract.

The Contract provides that "Calpine may terminate [the Contract]for its own convenience at any time by written notice to[NEPCO]." Effective November 30, 2001, Calpine cancelled theContract.

At the pendency of Enron Corporation and its debtor-affiliates'bankruptcy cases, Calpine filed Claim No. 4179 against NEPCO for$39,619,036 for alleged overpayment under the Contract. Calpinepaid NEPCO $108,034,507, but because NEPCO allegedly failed to,among other things, sufficiently progress on the Project and paycertain subcontractors, NEPCO purportedly incurred only$63,712,847 in costs on the Project. Given the mark up of$4,702,624, NEPCO was only entitled to $68,415,471, according toCalpine's computations.

In addition, Calpine filed Claim No. 12730 against Enron for thesame amount on account of the Guaranty.

Calpine also filed Claim No. 12729 against Enron and Claim No.22162 against NEPCO for the same amounts in the previous claims.The two claims are based on allegations that Enron, through itscentralized cash management system, improperly swept the paymentsmade by Calpine to NEPCO pursuant to Contract and that thealleged $39,619,036 overpayment to NEPCO is held by Enron, NEPCOand their affiliates in a constructive trust or otherwise is owedto Calpine under theories of conversion, fraud unjust enrichmentand other equitable principles.

In connection with the Project, NEPCO utilized the services ofmany subcontractors. Between June 19, 2002, and December 5,2002, certain subcontractors filed proofs of claim for amountsallegedly owed by NEPCO for labor, services, materials, tools,equipment and rentals supplied in connection with the Project.Some, though not all, of these claims, purport to be secured byproperty at the Project.

Through a series of settlements and agreements with certainsubcontractors, Calpine paid the Subcontractors in exchange for:

-- a release of all claims the subcontractors may have had against Calpine, including a release of liens; and

-- an assignment of all or part of the subcontractor's claim against NEPCO to Calpine.

Calpine also paid other subcontractors to settle legal claimsrelated to the Project, without entering into formal settlementagreements. Calpine has asserted subrogation rights in theclaims filed by the Informal Settlement Subcontractors againstNEPCO.

The Debtors and Calpine have engaged in negotiations to resolvetheir differences in connection with the Contract and the Claims.

In resolution of all matters between them, the Parties agreethat:

1. Claim No. 4179 is allowed as a Class 67 claim against NEPCO for $26 million. Any prior disallowance or expungement of the Claim will be without effect;

2. Claim 12730 is allowed as a Class 185 claim against Enron for $26 million;

3. Claim Nos. 12729 and 22162 are disallowed in full;

4. 31 subcontractor claims are disallowed in full for all purposes in the Debtors' Chapter 11 cases:

7. All scheduled liabilities of the Debtors to Calpine, the subcontractors or other parties arising from, related to or connected with the Project, Contract, Guaranty Agreement, Subrogation Claims, Subcontractor Claims or Subcontractors Settlements are expunged.

Headquartered in Houston, Texas, Enron Corporation is in the midstof restructuring various businesses for distribution as ongoingcompanies to its creditors and liquidating its remainingoperations. Before the company agreed to be acquired, controversyover accounting procedures had caused Enron's stock price andcredit rating to drop sharply.

ENRON CORP: Gets Court Approval on Ecoelectrica Settlement Pact---------------------------------------------------------------The U.S. Bankruptcy Court for the Southern District of New Yorkapproved the settlement agreement between Enron Corporation andits debtor-affiliates and EcoElectrica, L.P.

On October 31, 1997, EcoElectrica, L.P. entered into contracts inconnection with its power plant, desalination plant, and liquidnatural gas import terminal and storage facility with entitiesindirectly owned or controlled by Enron Corp. The contractsinclude these agreements:

1. Tolling Agreement with Enron LNG Power (Atlantic) Ltd.,

2. LPG Agreement with The Protane Corporation,

3. Onshore Construction Contract with Enron Power I (Puerto Rico), Inc., and

4. Offshore Supply Contract with Enron Equipment Procurement Company.

Enron and Enron Power Corp. guaranteed the Contracts.

The second and final phase of the Onshore Contract, Andrew M.Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, relates,was completed by Enron Puerto Rico ahead of schedule, entitlingit to an early completion bonus for $1,326,968 and other paymentsfor $1,290,000, subject to interests at 2% per annum.

EcoElectrica withheld timely payment of the Completion Bonuspending resolution of its general warranty claims against EEPCand Enron Puerto Rico for:

-- $851,396 in completing the Warranty Claims, and

-- $195,000 paid to the Environmental Protection Agency in response to a Notice of Violation from the Agency.

EcoElectrica asserted that it may set off a portion of theCompletion Bonus in satisfaction of those claims, and that doingso is not stayed by Section 362(a) of the Bankruptcy Code becauseEnron Puerto Rico is not a Debtor.

EcoElectrica wired $1,864,868 to Enron Puerto Rico, whichrepresented the Completion Bonus plus interest through July 31,2004, less the alleged offset.

b. The parties will exchange mutual releases of claims related to the Contracts;

c. Each claim filed by or on behalf of EcoElectrica or ABN Amro against the Enron Entities in connection with the Contracts will be deemed irrevocably withdrawn, with prejudice, and to the extent applicable, expunged and disallowed; and

d. Each scheduled liability related to EcoElectrica or ABN Amro will be deemed irrevocably withdrawn, with prejudice, and to the extent applicable, expunged and disallowed.

Headquartered in Houston, Texas, Enron Corporation is in the midstof restructuring various businesses for distribution as ongoingcompanies to its creditors and liquidating its remainingoperations. Before the company agreed to be acquired, controversyover accounting procedures had caused Enron's stock price andcredit rating to drop sharply.

As reported in the Troubled Company Reporter on May 23, 2005,Moody's Investors Service placed the ratings for ExideTechnologies, Inc. and its foreign subsidiary Exide GlobalHoldings Netherlands CV on review for possible downgrade.

Management announced that a preliminary evaluation of Exide'sresults for the fourth quarter ended March 2005 strongly indicatesthat the company will be in violation of its consolidated adjustedEBITDA and leverage ratios as of fiscal year end. Moody'sconsiders this is a significant event, given that these covenantswere all very recently reset during February 2005 in connectionwith Exide's partial refinancing of its balance sheet.

The company has initiated amendment negotiations with its lenders,but will not have access to any portion of the $69 million ofunused availability under its revolving credit facility until theamendment process is completed. Exide had approximately$76.7 million of cash on hand as of the March 31, 2005 fiscal yearend reporting date. However, this amount had declined to about$42 million as of May 17, 2005 due to the company's use of cash tofund seasonally high first quarter working capital needs, as wellas approximately $8 million in pension contributions and arequired $12 million payment related to a hedge Exide has ineffect.

* $89.5 million remaining term loan due May 2010 at Exide Technologies, Inc.;

* $89.5 million remaining term loan due May 2010 at Exide Global Holdings Netherlands CV.;

* Euro 67.5 million remaining term loan due May 2010 at Exide Global Holdings Netherlands CV.;

-- B2 senior implied rating for Exide Technologies, Inc.;

-- Caa1 senior unsecured issuer rating for Exide Technologies, Inc.

As reported in the Troubled Company Reporter on May 19, 2005,Standard & Poor's Ratings Services lowered its corporate creditrating on Exide Technologies to 'B-' from 'B+', and placed therating on CreditWatch with negative implications. The ratingaction follows Exide's announcement that it likely violated bankfinancial covenants for the fiscal year ended March 31, 2005.

Lawrenceville, New Jersey-based Exide, a manufacturer ofautomotive and industrial batteries, has total debt of about $750million.

The covenant violations would be a result of lower-than-expectedearnings. Exide estimates that its adjusted EBITDA for the fiscalyear ended March 31, 2005, will be only $100 million to $107million, which is substantially below the company's forecast and40% below the previous year. The EBITDA shortfall stemmed fromhigh lead costs, low overhead absorption due to an inventoryreduction initiative, other inventory valuation adjustments, andcosts associated with accounting compliance under the Sarbanes-Oxley Act. Exide is working with its bank lenders to secureamendments to its covenants.

"The company continues to be challenged by the dramatic rise inthe cost of lead, a key component in battery production thatnow makes up about one-third of Exide's cost of sales," saidStandard & Poor's credit analyst Martin King.

FALCON PRODUCTS: Drafts Joint Plan with Oaktree & Whippoorwill--------------------------------------------------------------Falcon Products, Inc. (OTC: FCPR) prepared a joint Plan ofReorganization that it intends to file with the U.S. BankruptcyCourt for the Eastern District of Missouri, Eastern Division.Funds and accounts managed by Oaktree Capital Management, LLC, andWhippoorwill Associates, Inc., will be co-proponents of the Plan.

The Company currently expects to file a disclosure statement nolater than Aug. 1, 2005.

"Filing the Plan of Reorganization represents a critical milestonein our efforts to restructure Falcon, maintain its leadership inthe commercial furniture industry and return the business toprofitability and growth," Franklin A. Jacobs, the Company'sfounder said. "Over the past six months I've worked with membersof the management team, and more recently with John Sumner, todevelop a comprehensive business plan that we believe will enableFalcon to provide superior value and satisfaction to ourcustomers. I am confident that John Sumner and the other membersof the management team will successfully implement our businessplan which will put Falcon on the right path towards a very brightfuture."

The Plan

The Company's Joint Plan provides for a comprehensivereorganization and debt recapitalization. Under the terms of thePlan, debt will be reduced from over $250 million to less than$90 million, thereby significantly lowering the Company's cashinterest requirements and allowing more operating cash flow to beutilized in the business. The Plan envisions a significantconversion of debt to equity and an infusion of new capital via arights offering that will be backstopped by the co-proponents,Oaktree Capital Management, LLC and Whippoorwill Associates. ThePlan does not provide for any distributions to:

however, certain unsecured creditors who qualify under FederalSecurities Laws will be able to participate in the rightsoffering.

The Plan proponents believe this change from the terms outlined inthe non-binding term sheet executed in January 2005 is necessaryfor the confirmation of a viable plan of reorganization which isbased on the comprehensive business plan recently developed by theCompany. Upon consummation of the Plan, the majority of Falcon'sequity will be held by Oaktree and Whippoorwill and the Companywill no longer be a public reporting entity.

"We are excited about the plan and believe our investment willprovide the Company with the flexibility it needs to execute itsbusiness plan," said Shelley Greenhaus, president of WhippoorwillAssociates. "We are optimistic about Falcon's business prospectsand look forward to our long term involvement with Falcon and itsemployees."

Confirmation and consummation of Falcon's Plan of Reorganizationis subject to a number of conditions including approval by certaincreditors of the Company and approval by the Bankruptcy Court.Falcon will solicit acceptance of the plan following approval ofits disclosure statement by the Bankruptcy Court. A hearing onthe confirmation of the Plan is expected to take place in October2005. There can be no assurance, however, that the Plan as filedwill be adopted and approved.

Headquartered in Saint Louis, Missouri, Falcon Products, Inc. --http://www.falconproducts.com/-- designs, manufactures, and markets an extensive line of furniture for the food service,hospitality and lodging, office, healthcare and education segmentsof the commercial furniture market. The Debtor and its eightdebtor-affiliates filed for chapter 11 protection on January 31,2005 (Bankr. E.D. Mo. Lead Case No. 05-41108). Brian WadeHockett, Esq., and Mark V. Bossi, Esq., at Thompson Coburn LLPrepresent the debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they listed$264,042,000 in assets and $252,027,000 in debts.

FALCON PRODUCTS: Audit Committee Concludes Investigation--------------------------------------------------------Falcon Products, Inc. (OTC: FCPR) disclosed that a final reportrelating to the previously announced Audit Committee investigationhas been issued. Based on the report, the Audit Committee hasconcluded that the Company's financial statements for periodsdating back to the fiscal year ended Oct. 31, 2003, have beenmaterially misstated. Accordingly, the Company's financialstatements for FY 2003 and the first three quarters of FY 2004should not be relied upon. The Company intends to file a Form 8-Krelating to the non-reliance on previously issued financialstatements.

On Jan. 4, 2005, the Company said it expected to record asignificant charge relating to the write-down of inventory duringthe fourth quarter of FY 2004 and that it believed it was likelythat the inventory write-down would impact prior periods. Duringthe course of the FY 2004 yearend financial statement audit, theCompany identified additional adjustments that it believed couldimpact prior periods. The estimated amount of such adjustmentswill be disclosed in the Form 8-K. As a result of the Company'scurrent financial and internal resource constraints, it has notbeen able to quantify the impact of the inventory write-down andother adjustments on prior periods. As such the Company iscurrently unable to restate prior period financial statements.

CEO Resignation

The Company also disclosed the departure of Franklin A. Jacobs whohas resigned and will be retiring from his positions as Falcon'schairman, president and chief executive officer. Falcon's Boardof Directors has elected John S. Sumner, Jr., who was named chiefrestructuring officer in March, as acting president and chiefexecutive officer.

"Frank Jacobs has been a dominant presence in the commercialfurniture industry for over 40 years and the driving force behindFalcon," Jordon Kruse of Oaktree Capital Management, LLC, whoalong with Whippoorwill Associates are co-proponents of a JointPlan of Reorganization, said. "Frank's extraordinary vision andpassion for the business were key factors in the development ofthe business plan that we believe will enable Falcon to reach newheights."

Headquartered in Saint Louis, Missouri, Falcon Products, Inc. --http://www.falconproducts.com/-- designs, manufactures, and markets an extensive line of furniture for the food service,hospitality and lodging, office, healthcare and education segmentsof the commercial furniture market. The Debtor and its eightdebtor-affiliates filed for chapter 11 protection on January 31,2005 (Bankr. E.D. Mo. Lead Case No. 05-41108). Brian WadeHockett, Esq., and Mark V. Bossi, Esq., at Thompson Coburn LLPrepresent the debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they listed$264,042,000 in assets and $252,027,000 in debts.

FEDERAL-MOGUL: District Ct. Lifts Navigant Fee Cap for Estimation-----------------------------------------------------------------As previously reported, the U.S. Bankruptcy Court for the Districtof Delaware expanded Navigant Consulting, Inc.'s fee cap to$184,207 and reiterated that the cap was without prejudice to theright of the Official Committee of Property Damage Claimants toask for further modification.

As reported in the Troubled Company Reporter on Jan. 17, 2005, theAsbestos Property Damage Committee appointed in Federal-MogulCorporation and its debtor-affiliates' chapter 11 cases hiredNavigant Consulting to serve as its asbestos claims consultant.

Theodore J. Tacconelli, Esq., at Ferry, Joseph & Pearce, P.A., inWilmington, Delaware, asserts that no cap on Navigant's fees isnecessary. Navigant has provided cost-effective services to thePD Committee and has performed its estimate at far less expensethan any of the other consultants providing similar services toother constituencies in the Debtors' cases. Mr. Tacconelli notesthat Legal Analysis Systems, Inc., the asbestos claims consultantretained by the Official Committee of Asbestos Claimants, hasbilled over $1.3 million and is subject to no cap on its fees.Similarly, the Analysis Research Planning Corporation, consultantto the Legal Representative for future Asbestos Claimants, hasbilled over $2 million and similarly is subject to no cap. Mr.Tacconelli, thus points out that the PD Committee's opponents inthe asbestos litigation are not hampered by any limitation on thecosts their claims consultants incur.

In light of the expansion of the scope of estimation hearing andto take account of developments since the preparation of the PDCommittee's initial estimate, including new case law onestimation of asbestos bodily injury claims, the PD Committeeasks Judge Rodriguez for approval to modify Navigant's retentionto perform additional services. The PD Committee asks theDistrict Court to eliminate the limitation on fees previouslyimposed by the Bankruptcy Court.

Accordingly, Judge Rodriguez lifts the Fee Cap for NavigantConsulting with respect to the work performed for the estimationhearing.

FORD MOTOR: Will Reduce Salary Related Costs Due to Weak Outlook----------------------------------------------------------------Ford Motor Company (NYSE: F) reduced its full-year earnings pershare guidance for 2005, as the profit outlook for the Company'sNorth America automotive operations worsened due to a weakeroutlook for vehicle sales and continued supplier-relatedchallenges.

The Company reported the 2005 full-year earnings guidance wasbeing reduced to a range of $1.00 to $1.25 per share, down fromprevious guidance of $1.25 to $1.50 per share, each excludingspecial items and discontinued operations.

In addition, the Company raised its second-quarter earningsguidance to a range of $0.30 to $0.35 per share, excluding specialitems, primarily because of a reduced tax-rate assumption (full-year rate of 15%) and stronger-than- anticipated results from FordMotor Credit. Previously, second-quarter earnings guidance hadbeen in the range of breakeven to $0.15 per share, excludingspecial items. (Anticipated special items and charges related todiscontinued operations for 2005 are detailed at the end of thisrelease.)

During the Company's first-quarter conference call in April,Chairman and Chief Executive Officer Bill Ford said the Companywould respond to its significant operating challenges through anacceleration of its business plan. Since then the Company has:

* Signed a Memorandum of Understanding with Visteon Corp., its largest supplier. The transaction is expected to close by September 30, 2005, and over time will lead to a steady flow of more competitively priced, high- quality parts, systems and components.

* Announced an S-1 filing for its wholly-owned Hertz Corp. -- a first step toward a possible initial public offering of a portion of the rental car company. The filing indicated that, following any initial public offering, Ford would expect to completely divest its stake in Hertz.

In addition, the Company reported several actions aimed at furtherreducing the Company's salaried-related costs this year. Theyinclude:

* A 5% reduction in salaried positions in Ford's North America operations by October 1, 2005 and a 10% reduction in the operation's use of agency and purchased services by July 1, 2005. This is in addition to actions announced in April which reduced about 1,000 salaried positions.

Ford Motor Company, a global automotive industry leader based inDearborn, Michigan, manufactures and distributes automobiles in200 markets across six continents. With more than 324,000employees worldwide, the company's core and affiliated automotivebrands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln,Mazda, Mercury and Volvo. Its automotive-related services includeFord Motor Credit Company and The Hertz Corporation.

* * *

As reported in the Troubled Company Reporter on May 23, 2005,Fitch Ratings downgraded the senior unsecured debt ratings of FordMotor Corporation and Ford Motor Credit Corporation to 'BBB' from'BBB+'. Ratings on the Capital Trust II securities have beendowngraded to BB+ from BBB-. The rating outlook remains negative.

Fitch also affirms the 'F2' commercial paper. The ratings ofHertz have been downgraded to 'BBB' from 'BBB+' and placed onRating Watch: Evolving. A complete list of ratings is detailed atthe end of this release.

FMC CORPORATION: Executes New $850 Million Unsec. Credit Agreement------------------------------------------------------------------FMC Corporation (NYSE: FMC) reported that it has executed a newunsecured credit agreement with a group of lenders providing forextensions of credit in the aggregate amount of $850 million. Thenew five-year credit agreement provides for a $600 millionrevolving credit facility ($250 million of which is available forthe issuance of letters of credit) and a $250 million term loan.

The new credit agreement replaces a $600 million secured creditagreement entered into in October 2004. In addition to the newcredit agreement being unsecured, it provides more favorablepricing and greater financial flexibility than the previous creditagreement.

The Company also reported that it has called for redemption onJuly 21, 2005, all of its 10.25% Senior Secured Notes Due 2009outstanding in the aggregate principal amount of $355 million. Theredemption price of the Notes will be 100 percent of the principalamount of the Notes plus accrued interest to the redemption dateand a "make-whole" premium that will be determined prior to theredemption date, in accordance with the indenture governing theNotes.

During the second and third quarters of 2005, the Company willrecord losses on debt extinguishments of approximately $2 millionand $56 million, respectively, reflecting the write-off ofunamortized financing costs and the estimated $45 million premiumpayable upon redemption of the Notes.

As a result of lower interest expense related to the new creditagreement and the redemption of the Notes, the Company now expectsfull-year earnings before restructuring and other income andcharges to be on the higher end of the previously guided range of$4.15-4.30 per diluted share. The balance of the Company'soutlook provided on May 3, 2005 remains unchanged.

FMC Corporation is a diversified chemical company servingagricultural, industrial and consumer markets globally for morethan a century with innovative solutions, applications and qualityproducts. The company employs approximately 5,000 peoplethroughout the world. The company operates its businesses inthree segments: Agricultural Products, Specialty Chemicals andIndustrial Chemicals.

* * *

As reported in the Troubled Company Reporter on June 8, 2005,Moody's Investors Service placed the ratings of FMC Corporation(FMC -- Ba1 senior implied) on review for possible upgrade. FMC'sexisting debt ratings will likely be raised to Baa3 uponcompletion of an amended bank facility.

The reviews are prompted by Moody's belief that the company hasmade significant progress reducing contingent liabilities andimproving credit metrics, and that a general economic upturn willtranslate into improved performance for 2005 and 2006. Inaddition the review incorporates the new terms of the proposedbank facilities that will be unsecured and reflect the terms andconditions suitable for an investment grade profile.

FMC's proposed senior secured credit facility consisting of a$350 million term loan A, and a $500 million revolving creditfacility -- both to be extended to June 2010 will likely be raisedto Baa3. Proceeds from the amended credit facility will be usedto refinance the existing term loan A and to allow for theredemption of the $355 million 10.25% senior secured notes due2009.

FMC's ratings outlook, will be moved to stable. The other debtratings that will be raised reflect the banks' willingness toforego a secured position such that all debt is now viewed aseffectively pari passu. The actions are subject to a final reviewof the documentation of the proposed bank agreements. The SGL-2rating was affirmed and will be withdrawn upon completion of theproposed bank agreements.

Ratings placed on review for possible upgrade:

-- $500 million revolver due 2010 -- currently Ba1 -- will be raised to Baa3

-- $350 million term loan A due 2010 -- currently Ba1 -- will be raised to Baa3

-- $45 million debentures due 2011 -- Ba2 -- will be raised to Baa3

-- Medium-term notes due 2005 to 2008 -- Ba2 -- will be raised to Baa3

-- $100 million senior secured letters of credit facility due 2009 -- Ba1 -- will be raised to Baa3

-- Senior Implied Rating -- Ba1

-- Issuer Rating -- Ba3

Ratings affirmed

-- Speculative Grade Liquidity Rating -- SGL-2

GARDEN RIDGE: Has Until June 30 to Decide on 32 Remaining Leases---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware furtherextended until June 30, 2005, the period within which Garden RidgeCorporation and its debtor-affiliates can elect to assume, assumeand assign, or reject their unexpired nonresidential real propertyleases.

The Court confirmed the Debtors' First Amended Joint Plan ofReorganization on April 29, 2005, and the Plan took effect onMay 12, 2005.

The Debtors explain that they are parties to 32 unexpirednonresidential real property leases located in 13 differentstates.

The confirmed Plan contemplates the assumption of substantiallyall of the Debtors' remaining unexpired leases in accordance withnegotiated amendments to the lease agreements of those unexpiredleases.

The Debtors remind the Court that it authorized the retention ofHuntley, Mullaney & Spargo, LLC, as their special real estateconsultant on April 19, 2004. Since its retention, HuntleyMullaney has evaluated the Debtors' 32 remaining unexpired leasesand analyzed the alternatives for each of those leases.

The Debtors gave the Court three reasons in support of theextension:

1) they and Huntley Mullaney are still in the process of concluding negotiations and entering into lease amendments with the landlords of the remaining unexpired leases;

2) the remaining unexpired leases are a critical component of their business operations and are vital in their ability to preserve the value of their estates in the post-confirmation process; and

3) the extension will not prejudice the landlords of the remaining unexpired leases because the Debtors are current on all post-petition rent obligations under the leases and to the extent prescribed by Section 365(d)(3) of the Bankruptcy Code.

GENEVA STEEL: Ch. 11 Trustee Hires Ray Quinney as Local Counsel---------------------------------------------------------------The U.S. Bankruptcy Court for the District of Utah, CentralDivision, authorized James T. Markus, the chapter 11 Trusteeappointed in Geneva Steel LLC's bankruptcy case, to retain Ray,Quinney & Nebeker, PC, as his local counsel.

Ray Quinney is one of the oldest and largest law firms in Utah andthe Intermountain West. The Firm has 86 attorneys and acomparable number of staff members working in its principal officein Salt Lake City, Utah, and its branch office in Provo, Utah.

Annette W. Jarvis, Esq., and Steven T. Waterman, Esq.,shareholders at Ray Quinney, are the attorneys who will beprimarily involved in the Debtor's cases.

To the best of the Trustee's knowledge, Ray Quinney is a"disinterested person" as that term is defined in Section 101(14)of the Bankruptcy Code.

Headquartered in Provo, Utah, Geneva Steel LLC owns and operatesan integrated steel mill. The Company filed for chapter 11protection on January 25, 2002 (Bankr. Utah Case No. 02-21455).Andrew A. Kress, Esq., Keith R. Murphy, Esq., and Stephen E.Garcia, Esq., at Kaye Scholer LLP represent the Debtor in itschapter 11 proceedings. When the Company filed for protectionfrom its creditors, it listed $262 million in total assets and$192 million in total debts.

GLASS GROUP: Committee Taps FTI Consulting as Financial Advisors---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave theOfficial Committee of Unsecured Creditors of The Glass Group,Inc., permission to employ FTI Consulting, Inc., as its financialadvisors.

FTI Consulting will:

1) assist the Committee in the review of financially related disclosures required by the Court, and assist in the review of the Debtor's short-term cash management procedures;

2) assist and advise the Committee with respect to the Debtor's identification of core business assets and the disposition of assets or liquidation of unprofitable operations;

3) assist in the review of the Debtor's performance of cost and benefit evaluations with respect to the affirmation or rejection of various executory contracts and unexpired nonresidential real property leases;

4) assist in the valuation of the Debtor's present level of operations and identification of areas or potential cost savings, including overhead and operating expense reductions and efficiency improvements;

5) assist in the review of financial information distributed by the Debtor to creditors and other parties-in-interest, including cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is required;

6) assist in the review and preparation of information and analysis necessary for the confirmation of a chapter 11 plan and approval for an accompanying disclosure statement;

7) assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; and

8) render other business and financial advisory services to the Committee or its counsel that is necessary in the Debtor's bankruptcy proceeding.

Samuel Star, a member at FTI Consulting, disclosed that the Firmwill be paid a $50,000 Monthly Fee, plus reimbursement of othernecessary expenses incurred by FTI during its term of engagementby the Debtor.

FTI Consulting assures the Court that it does not represent anyinterest materially adverse to the Committee, the Debtor or itsestate.

Headquartered in Millville, New Jersey, The Glass Group, Inc.-- http://www.theglassgroup.com/-- manufactures molded glass container and specialty products with plants in New Jersey andMissouri. Its products include cosmetic bottles, pharmaceuticalvials, specialty jars, and coated containers. The Company filedfor chapter 11 protection on Feb. 28, 2005 (Bankr. D. Del. CaseNo. 05-10532). Derek C. Abbott, Esq., at Morris, Nichols, Arsht &Tunnell represents the Debtor in its restructuring efforts. Whenthe Debtor filed for protection from its creditors, it estimatedassets and debts of $50 million to $100 million.

GT intends to issue $400 million of 10-year notes under Rule 144A.Proceeds will be used to repay $200 million outstanding under thecompany's first lien revolving credit facility and to replace$190 million of cash balances that were used to pay $516 millionof 6.375% Euro notes that matured June 6, 2005. The RatingOutlook is Stable.

The rating reflects the substantial amount of senior secured debtrelative to the planned notes. It also incorporates Fitch'sconcerns about GT's high leverage, high-cost structure, and weakprofitability and cash flow. In addition, GT's pension plans,which were underfunded by $3.1 billion at the end of 2004, arelikely to require substantially higher contributions over the nearterm.

Partly mitigating these concerns are the company's $1.7 billion ofcash balances at March 31, 2005 and additional flexibilityprovided by new bank facilities executed in April 2005 thatextended maturities out to 2010. The rating considers Goodyear'swell-recognized brand name, its position as one of the threelargest global tire companies, and progress in addressing its debtstructure and operating performance.

GT's segment profit has recently benefited from an improvedreplacement tire market, higher selling prices, cost saving fromprevious restructuring, and the favorable impact from foreigncurrency translation. While the company has seen strongacceptance of new products, margins remain pressured by rawmaterial and transportation costs and a highly competitiveenvironment. In addition, GT's key North American Tire segmentsuffers from a high cost structure related to labor and pensioncosts that make margin improvement particularly challenging.

Operating cash flow has improved in recent quarters and could besupplemented by the pending divestitures of GT's North AmericanFarm tire business and its rubber plantation in Indonesia.However, even after the planned debt issuance, additional debt orequity issuance may be needed to meet cash requirements thatinclude capital expenditures and pension contributions as well aslong-term debt maturities of approximately $650 million throughthe end of 2007. GT's cash and borrowing capacity provideadequate liquidity in the short term, but the rating reflectsuncertainty surrounding the company's ability to rebuild andsustain stronger cash flow over the long term.

GOODYEAR TIRE: Moody's Rates New $400M Sr. Unsecured Notes at B3----------------------------------------------------------------Moody's Investors Service assigned a B3 rating to the new$400 million ten year senior unsecured notes to be issued byGoodyear Tire & Rubber Company. Proceeds from the notes willinitially be used to repay outstandings under the company'srevolving credit facility and restore cash balances following therepayment earlier this month of ?400 million (approximately $500million) of unsecured notes.

The issuance increases the total amount of financing Goodyear hasraised in 2005 to roughly $4 billion. The capital raised has:

* refinanced several maturing obligations;

* lengthened the company's debt maturity profile; and

* provided additional liquidity to facilitate the company's restructuring strategy and to address required contributions under its domestic pension plan.

2) it has good liquidity to cover its operating needs including pension contributions over the next few years; and

3) its competitive position remains solid.

The B3 rating to the new notes is level with the current unsecuredrating of Goodyear and is two notches below the corporate familyrating (previously called senior implied) of B1. The transactionis modestly beneficial to the company's liquidity position. As aresult, the liquidity rating of SGL-2 has been affirmed.

The notes will be sold in a privately negotiated transactionwithout registration under the Securities Act of 1933 undercircumstances reasonably designed to preclude a distributionthereof in violation of the Act.

The issuance has been designed to permit resale under Rule 144A.

The issue will be kept pari passu with existing senior unsecuredindebtedness through the provision of up-streamed guarantees fromcertain domestic operating subsidiaries. Compared to indenturesfor other unsecured obligations of Goodyear, the indenture for thenew notes would permit a higher level of domestic assets to bepledged prior to the provision of equal and ratable security tothe note holders (subject to the formal terms, conditions,exclusions and other limitations contained in the document).

Goodyear recently retired its ?400 million obligation from fundson hand and a $200 million drawing under its $1.5 billion seniorsecured first lien credit facility. Upon receipt of proceeds fromthe new notes, the company will repay those borrowings andreplenish its cash position.

On a pro forma basis for the $3.65 billion of financing completedin April 2005, the repayment of the ?400 million of notes, and thenew $400 million unsecured notes and the expected use of proceeds,Goodyear would have approximately $1.8 billion of cash at March31, 2005 and aggregate balance sheet debt of $5.6 billion.

The sum of balance sheet debt plus issued letters of credit totrailing twelve month EBITDA would be approximately 3.9 times,slightly higher adjusted for the present value of operating leasesand limited use of off balance sheet securitization facilities.The new financing transaction does not materially impact any ofthe leverage or coverage ratios that supported the assignment ofGoodyear's B1 corporate family rating or B3 senior unsecuredobligations earlier this year. Goodyear's credit metrics shouldremain within the B1 corporate family rating range. The outlookis stable.

The new financing benefits Goodyear's liquidity profile throughthe restoration of its cash position and preservation ofavailability under its revolving credit. The company faces higherpension contributions in 2005 ($400-$425 million) and 2006 ($600-$650 million) compared to $163 million in 2004.

In addition it has debt maturities of approximately $350 millionin 2006 ($125 million equivalent of Swiss Franc bonds in March,and $225 million in December). The combination of cash flow fromoperations, cash on hand, modest asset sale proceeds, comfortablecushion under its the financial covenants contained in its 2005financing, and access to its revolving credit should allow thecompany to sufficiently cover these requirements. The SGL-2rating has been affirmed indicating the company has good liquidityover the next twelve months.

Goodyear Tire & Rubber, headquartered in Akron, Ohio, is one ofthe world's leading manufacturers of tire and rubber products with2004 revenues of $18.4 billion. The company manufactures tires,engineered rubber products and chemicals in 90 facilities in 28countries and employs about 80,000 people.

HARRAH'S ENT: Fitch Rates New $4 Billion Credit Facility at BBB-----------------------------------------------------------------Fitch Ratings has affirmed the long-term debt ratings of Harrah'sOperating Co., a wholly owned operating subsidiary of Harrah's,Entertainment (NYSE: HET) and assigned a 'BBB-' rating to the new$4 billion revolving credit facility due in April 2009.

At the same time, Fitch has resolved the Positive Rating Watchstatus on the senior unsecured and subordinated debt ratings ofCaesars Entertainment (CZR) with respective upgrades to 'BBB-' and'BB+'. The rating action follows completion of Harrah'sacquisition of CZR on June 13, 2005.

With closing of the CZR acquisition, CZR has been merged into HOC,a wholly owned operating subsidiary of HET, where virtually allthe debt and assets reside. Pre-existing debt in the structurecurrently benefits from a holding company guarantee, and as perthe governing indentures, allows HET to file consolidatedfinancial statements as a proxy for HOC. HET is currentlysoliciting consents from CZR bondholders to also allow HET to fileat the parent level, and in exchange will provide CZR debt withthe parental guarantee. Fitch believes this to be a technicalissue that CZR bondholders will acquiesce to. However, in theevent that CZR public debt holders do not consent, the debt willnot be guaranteed.

Fitch finds the resulting structural subordination of CZR notesnot meaningful given the very limited risk that HET would notsupport the CZR debt ratably, and the fact that there arevirtually no assets at the holding company level. As such,regardless of the outcome of the consent offer (which should beresolved in the next few weeks), CZR ratings will be equalizedwith those of HOC.

Strategically, the acquisition allows HET to establish a strongerpresence on the Las Vegas Strip and reduces exposure to the morevolatile regulatory environments of regional riverboat markets.

While HET had expressed interest in building or buying discreteproperty on the Strip, the purchase allows HET to immediately takeadvantage of currently strong Las Vegas fundamentals in a moremeaningful way. CZR's Las Vegas portfolio should also allow HETto capture Total Rewards members who are bypassing Harrah'scurrent offerings in Las Vegas in favor of alternative properties.

Caesars' four prominent Strip properties include Caesars, Paris,Bally's, and Flamingo, which are situated at one of the busiestintersections at the center of the Strip. In addition, HET shouldbe able to improve same store sales and efficiency at CZRproperties by implementing its industry-leading player trackingsystems and loyalty programs. Returns on CZR's heavy capitalinvestment program over the past several years have beendisappointing and the upside exists in better asset utilization.

HET financed the cash portion of the CZR acquisition ($1.9billion) with borrowings under its revolving credit facility,increasing pro forma leverage to 4.3 times (x) at closing. Fitchexpects Harrah's to end 2005 with pro forma leverage ofapproximately 4.2x, versus actual 2004 leverage of 4.3x (whichincludes just six months of Horseshoe results).

Heavy capital expenditure plans in the range of $1.5 billionshould preclude significant debt reduction in 2005. However, ananticipated drop-off in spending in 2006 and a full-year of CZRresults should produce ample free cash flow for the company todeliver to levels appropriate for the rating (below 4.0x) by theend of 2006.

While closing leverage is high for the rating category, Fitchnotes that this is consistent with Harrah's historical capitalstructure policies with rapid improvement in leverage followingacquisition-related debt increases. With revolver capacityupsized to $4 billion at closing, liquidity remains solid, withroughly $2 billion remaining in available funds. Based on currentprojections, cash from operations combined with revolveravailability and cash-on-hand appear adequate to support thecompany's growth initiatives, meet debt maturities, and paydividends through at least year-end 2006.

Ongoing risks include the potential for further run-up in leveragedue to future acquisitions or development opportunities, potentialregulatory changes and/or tax increases (particularly in riverboatjurisdictions), and competitive threats to Illinois, AtlanticCity, and northern Nevada. As Harrah's largest acquisition todate, integration risks remain a key concern.

The Stable Rating Outlook reflects Fitch's expectation thatHarrah's will improve credit metrics to levels more appropriatefor the credit within 18 months of closing. The rating(s) andOutlook would be adversely affected if HET is unable to reducedebt in a timely manner or chooses to pursue additional large-scale debt-financed acquisitions, growth projects, and/or sharerepurchases.

HEALTHSOUTH CORP: Will File 2000 to 2003 Annual Report by June 29-----------------------------------------------------------------HealthSouth Corporation (OTC Pink Sheets: HLSH) will hold ameeting for investors in New York City on June 29, 2005, at 4:00p.m. Eastern Time to provide an update of its current operations,a review of its comprehensive Form 10-K for the years endedDec. 31, 2000 through Dec. 31, 2003, and a brief overview of itsstrategic business plan. The Company expects the meeting toconclude by 6 p.m. Eastern Time.

The Company affirmed its intent to file its comprehensive Form10-K with the Securities and Exchange Commission in advance of theJune 29 meeting. The Company also stated that it anticipates thefiling date for the comprehensive Form 10-K will be closer to theJune 29 meeting date than previously expected. This comprehensiveForm 10-K will contain restated financial statements for the years2000-2001 and financial statements for the years 2002-2003.

"We are in the final stage of a multi-stage, multi-year processneeded to complete the comprehensive Form 10-K," said HealthSouthCFO John Workman. "There have been hundreds of individuals whohave assisted in the extensive work that has been done to ensurethat our accounting records are reconstructed thoroughly and ourfinancial statements and other disclosures are prepared properlywith respect to these historical financial statements."

HealthSouth Corporation -- http://www.healthsouth.com/-- is one of the nation's largest providers of outpatient surgery,diagnostic imaging and rehabilitative healthcare services,operating facilities nationwide.

* * *

2004 Annual Report Will Be Delayed

HealthSouth filed a Form 12b-25 with the Securities and ExchangeCommission saying that it will not be filing its 2004 Form 10-K ontime due to the company's ongoing accounting reconstruction andrestatement efforts. The company is currently targeting thefiling of its 2004 Form 10-K in the fourth quarter of 2005. Thecompany says it plans to file a comprehensive Form 10-K for theyears ended Dec. 31, 2000, through Dec. 31, 2003, by the middle ofthe second quarter 2005. This comprehensive Form 10-K willcontain restated financial statements for periods which previouslyhad been reported and initial financial statements for the otherperiods covered by the report.

"Our external auditor is now auditing these documents and istaking steps to ensure a thorough review," said HealthSouth CFOJohn Workman. "We have been working extensively with externalresources to ensure that our accounting records are reconstructedthoroughly and our financial statements and other disclosures areprepared properly. This process has consumed more than 500 man-years of external labor resources and required millions of linesof adjusting journal entries. It is our intention to not rush aprocess of this importance to reach an earlier, self-imposeddeadline."

The upgrades reflect the increased subordination levels fromamortization and defeasance. As of the June 2005 distributiondate, the pool's balance has been reduced 14.1% to $867.1 millionfrom $1 billion at issuance. The trust has incurred approximately$11.6 million in losses due to the disposition of four assets. Inaddition, 15 loans (7.4%) have been defeased.

The pool contains three specially serviced loans (1.2%), of whichFitch expects losses to occur on only one. This loan (0.6%) issecured by a retail center in Watauga, TX. The property'sperformance has suffered since Winn Dixie rejected its lease inJune of 2002. The property was recently sold to the lender in aforeclosure sale. Based on recent appraisal values, losses areexpected.

Fitch reviewed the performance and underlying collateral of thetwo credit assessed loans in the pool: South Plains Mall (7.0%)and the Station Plaza Office Complex (2.4%). Based on theirstable performance, both credit assessments remain investmentgrade.

The South Plains Mall, located in Lubbock, TX, consists of 1.1million square feet, of which 1 million sf is collateral for theloan. Based on data provided by the master servicer, WachoviaSecurities, the year-end 2004 debt service coverage ratio declinedslightly, to 1.95 times (x) from 2.09x at issuance. Occupancy atthe property has remained stable at 98%.

The Station Plaza Office Complex consists of three officebuildings (320,477 sf) located in Trenton, New Jersey. Theproperties maintain a 100% occupancy level. Based on datasupplied by the master servicer, the DSCR has increased slightlysince issuance, from 1.26x to 1.27x.

HUFFY CORPORATION: Wants More Time to File Chapter 11 Plan----------------------------------------------------------Huffy Corporation and its debtor-affiliates ask the U.S.Bankruptcy Court for the Southern District of Ohio, WesternDivision, for an extension of their exclusive periods to file andsolicit acceptances of a chapter 11 plan. The Debtors want theirexclusive filing period extended to Sept. 10, 2005, and theirexclusive solicitation period stretched to Nov. 9, 2005.

The Debtors contend they need the extensions to avoid a prematureformulation of a chapter 11 plan and to ensure that the plan willtake into account the interests of Huffy's employees, creditorsand other parties-in-interests.

The Debtors tell the Court they are currently engaged innegotiations with the Official Committee of Unsecured Creditors,secured creditors and suppliers in order to draft a viable plan.In fact, Huffy adds, key management personnel traveled to China tomeet and negotiate with the Debtors' key suppliers.

Headquartered in Miamisburg, Ohio, Huffy Corporation --http://www.huffy.com/-- designs and supplies wheeled and related products, including bicycles, scooters and tricycles. The Companyand its debtor-affiliates filed for chapter 11 protection onOct. 20, 2004 (Bankr. S.D. Ohio Case No. 04-39148). Kim MartinLewis, Esq., and Donald W. Mallory, Esq., at Dinsmore & Shohl LLP,represent the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they listed$138,700,000 in total assets and $161,200,000 in total debts.

The Class B1 Notes, currently rated Ba3 on watch for possibleupgrade, have been upgraded to A2, and the Class B2 Notes,currently rated Ba3 on watch for possible upgrade, have beenupgraded to A2.

According to Moody's, the rating action on the Class B1 Notes andthe Class B2 Notes is due, in part, to the continuing amortizationof the transaction since the end of the reinvestment period inJuly 2003.

INFOUSA INC: Moody's Affirms $50M Credit Facility Rating at Ba3---------------------------------------------------------------Moody's Investors Service affirmed all of InfoUSA Inc.'s creditratings and changed the outlook to negative following theannouncement that an entity controlled by the company's founder,chairman and CEO, Vin Gupta, has made an offer to acquire all ofthe publicly held common shares of InfoUSA in a debt financedtransaction. Mr. Gupta currently owns approximately 38% of thecommon shares of InfoUSA.

Under the terms of the proposed offer, the holders of InfoUSAcommon stock, other than Mr. Gupta, would receive $11.75 in cashper share. The offer letter states that the consideration for thepublicly held common shares will be obtained solely from debtfinancing. The negative outlook reflects the substantial increasein debt levels and weakening of credit metrics that is expected tooccur if the offer is accepted. Moody's will evaluate thecompany's expected capital structure, liquidity position andbusiness strategies upon executing a definitive transactionagreement and consider the extent to which a ratings downgrade iswarranted.

INTERSTATE BAKERIES: Selling Boise Lot for $2.3M to R.W. Van Auker------------------------------------------------------------------Interstate Bakeries Corporation and its debtor-affiliates own aparcel of land at 420 North Five Mile Road, in Boise, Idaho, whichincludes a 63,052-square foot building. The Debtors currently useless than 5% of the total space in the Building for the operationof a thrift store.

After evaluating all owned and leased real estate to maximize thevalue of their businesses and assets, the Debtors determined thatthey no longer need the Boise Property.

Hence, the Debtors ask the U.S. Bankruptcy Court for the WesternDistrict of Missouri for authority to sell the Boise Property toRonald W. Van Auker, through Pioneer 1031 Company, subject tohigher or better offers.

The Debtors have entered into an Asset Sale Agreement with Mr.Van Auker, as the stalking horse bidder. The Debtors will sellthe Property for $2,315,015.

Mr. Van Auker has deposited $231,502 in an escrow account.

The Asset Sale Agreement also provide that:

* The sale of the Boise Property to Mr. Van Auker will include all of the Debtors' right, title and interest in the Property;

* The closing will occur within five business days of the Court's approval of the Asset Sale Agreement, subject to the payment of the Purchase Price;

The Debtors require offers for the Property to be delivered byJune 17, 2005. The Debtors will conduct an auction on June 24 ifa competing bid is received. The Debtors impose a $2,400,000minimum bid.

The Debtors also seek permission to pay Mr. Van Auker a $46,300termination fee if they consummate the sale with another bidder.The Debtors also seek to reimburse up to $2,500 of Mr. VanAuker's expenses. The Bid Protections are intended to compensateMr. Van Auker for making the first qualified bid and setting thefloor price for the Boise Property.

The Debtors propose to serve notice of the Boise Property Sale toall parties-in-interest. Accordingly, the Debtors will publish aweekly notice or advertisement of sale in the Idaho Statesman forthe two weeks preceding the Bid Deadline along with a notice oradvertisement of sale in The Wall Street Journal.

The Boise Property Sale will be considered at the June 28, 2005omnibus hearing scheduled by the Court in the Debtors' Chapter 11cases.

Headquartered in Kansas City, Missouri, Interstate BakeriesCorporation is a wholesale baker and distributor of fresh bakedbread and sweet goods, under various national brand names,including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),Merita(R) and Drake's(R). The Company employs approximately32,000 in 54 bakeries, more than 1,000 distribution centers and1,200 thrift stores throughout the U.S.

INTERSTATE BAKERIES: Selling Sta. Maria Lot for $720K to N. Shore-----------------------------------------------------------------Interstate Bakeries Corporation and its debtor-affiliates ask theU.S. Bankruptcy Court for the Western District of Missouri forauthority to sell a parcel of real property at 1790 WestBetteravia, in Santa Maria, California, for $720,000 to NorthShore Holdings, Ltd.

The Santa Maria Property includes an approximately 2,250-squarefoot building that the Debtors are not currently using.

The Debtors received three offers for the Santa Maria Property.With the assistance of Hilco Industrial, LLC, and Hilco RealEstate, LLC, the Debtors conducted a telephonic auction onJune 3, 2005.

* North Shore has deposited $50,100 in an escrow account. The Deposit will be held by the escrow agent until the Debtors satisfy all conditions to closing;

* The sale of the Santa Maria Property will include all of the Debtors' right, title and interest in the Property;

* The closing will occur within five business days of the Court's approval of the Asset Purchase Agreement, subject to the payment of the Purchase Price;

* The Debtors will deliver good and marketable fee simple title to the Land and Improvements, free and clear of liens, other than Permitted Exceptions; and

* The Santa Maria Property is being sold "as-is, where-is," with no representations or warranties, reasonable wear and tear and casualty and condemnation excepted.

The Debtors will pay Hilco $39,600 -- 5.5% of the Purchase Price-- for its marketing and disposition services.

The Debtors believe that the sale of Santa Maria Property toNorth Shore is the best way to maximize the value of theProperty, reduce indebtedness, improve liquidity to facilitatethe formulation and ultimate confirmation of a reorganizationplan, and yield the highest possible returns to creditors.

In the event North Shore fails to close the sale for any reason,the Debtors seek permission to consummate the sale with the nexthighest and best bidder.

The Debtors also want the Sale exempted from transfer, stamp orsimilar taxes, conveyance fees and recording fees, and costs andexpenses imposed by any federal, state, county or other local lawin connection with the Property's transfer or conveyance.

Headquartered in Kansas City, Missouri, Interstate BakeriesCorporation is a wholesale baker and distributor of fresh bakedbread and sweet goods, under various national brand names,including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),Merita(R) and Drake's(R). The Company employs approximately32,000 in 54 bakeries, more than 1,000 distribution centers and1,200 thrift stores throughout the U.S.

JEROME DUNCAN: Files Chapter 11 Petition in E.D. Michigan--------------------------------------------------------- Jerome-Duncan Inc., Michigan's largest Ford dealership and one ofthe five largest Ford dealerships in the country, filed forchapter 11 protection in the United States Bankruptcy Court forthe Eastern District of Michigan on June 17, 2005.

The filing resulted from a shareholder dispute between GailDuncan, who operates the dealership, and her father, RichardDuncan, who co-founded the dealership and still holds asignificant ownership stake, the dealership's generalmanager, Scott Reas, told The Detroit News.

Gail Duncan is the majority owner by a small percentage, andRichard Duncan is the minority owner, Mr. Reas said.

According to The Detroit News, Jerome-Duncan's annual revenueregularly tops $100 million. It has employed more than 200 peoplein recent years and is listed among the top female-ownedbusinesses in the country.

At the same time, Standard & Poor's assigned its 'BB-' rating toKG&E's $320 million secured facility bonds series 2005 due 2021.

The outlook remains positive. As of March 31, 2005, the Topeka,Kansas-based company had $1.5 billion of consolidated long-termdebt outstanding.

"The ratings on KG&E reflect Westar's consolidated credit profile,which includes a business profile based on the core verticallyintegrated electric utility operations in Kansas and a weak butimproving financial profile," said Standard & Poor's creditanalyst Barbara Eiseman.

The company has taken significant actions during the past twoyears to reduce its business risk and strengthen its aggressivelyleveraged balance sheet.

The positive outlook on KG&E mirrors that on Westar and recognizesthe significant actions management has taken to strengthen thecompany's financial condition and reduce its business risk.

However, to make the transition to investment grade, Westar mustachieve and sustain cash flow measures that are solidly investmentgrade and receive a reasonable rate decision in its pending ratecase.

KMART CORP: Ruth Clingan Wants Stay Lifted to Liquidate Claim-------------------------------------------------------------Ruth M. Clingan is the surviving spouse of decedent Thomas R.Clingan, on whose behalf she brought a complaint for medicalmalpractice and wrongful death. The complaint sought reliefagainst treating doctors as well as against Kmart Corporation,through its pharmacy operation, and Jack C. Sharp, the pharmacistemployed by Kmart.

Ms. Clingan filed Claim No. 30705 asserting in excess of$3,000,000 in damages. The claim was submitted to mediationprocess and Kmart later offered to compromise the claim for$100,000.

Ms. Clingan's attorneys rejected the offer.

Based on the Kmart's 21st Omnibus Objection, the value of theclaim was set at $100,000. Ms. Clingan clarified the Court'sApril 1, 2004 order ruling on the 21st Omnibus Objection and onMay 6, 2005, the Court entered an Agreed Order vacating itsApril 1, 2004 order as to Ms. Clingan's claim.

Ms. Clingan wants to proceed to judgment and liquidate her claimsolely against Mr. Sharp.

Kmart's counsel has advised Ms. Clingan that Kmart will not opposeher request.

By this motion, Ms. Clingan asks the Court to lift the stay as toClaim No. 30705 and allow her to liquidate her claim as to Kmartand obtain a judgment against Mr. Sharp.

Sears Holdings is in the process of integrating Kmart and Sears,Roebuck and Co. William K. Phelan, vice president and controllerof Sears Holdings Corporation, relates that, for purposes ofreviewing the results of operations and making asset-allocationdecisions during the first quarter 2005, Sears Holdings' newsenior management team continued to utilize the reportingstructures, which existed independently for Sears Roebuck andKmart prior to the merger.

According to Mr. Phelan, comparable store sales and total salesdecreased by 3.7% for the 13-weeks ended April 30, 2005 ascompared to 2.3% of the 13-weeks ended April 28, 2004. Mr. Phelanexplains that the decline in same-store and total sales is due to:

-- the unfavorable impact of ongoing construction activity in stores, which are converting to the Sears Essentials format.

Total sales benefited from an additional $153 million of sales asa result of three additional days in the current quarter due toSears Holdings' change from a Wednesday to Saturday month end.However, total sales were negatively impacted by a reduction inthe total number of operating Kmart stores, which more than offsetthe additional three days of revenue.

Selling and administrative expenses increased slightly asdecreases in payroll and related expenditures resulting from costsaving initiatives were more than offset by an increase inadvertising expenses for local advertising programs. The currentyear's selling and administrative expenses also include a$3 million charge related to employee termination costs associatedwith Sears Holdings' home office integration efforts.

Kmart's operating income for the 13-weeks ended April 30, 2005,decreased as compared to the 13-weeks ended April 28, 2004,primarily due to the 2.3% decline in merchandise sales andservices revenues and the additional $26 million of gains on thesale of assets recognized during the same period in the prioryear.

KRISPY KREME: Five Officers Resign While One Retires----------------------------------------------------Five Krispy Kreme Doughnuts, Inc., officers resigned and oneretired after the Company's Special Committee of independentdirectors told the Company's senior management on June 15, 2005,that those officers should be fired.

The Special Committee is cooperating with the Government, which isinvestigating the Company's accounting and financial statements,and claims of negligence asserted in a pending shareholders'lawsuit.

The Company is keeping the identity of these six officers asecret. According to news reports, these officers worked inKrispy Kreme's operations, finance, business development, andmanufacturing and distribution departments. They include foursenior vice presidents.

The Associated Press observed that Krispy Kreme removed the namesof five senior vice presidents from its Web site on June 21. TheAP identified these senior vice presidents:

The Company said it will fill the vacant positions with existingpersonnel.

"I'm very pleased they're taking such serious action," Peter JamesHall told Bloomberg News. Mr. James oversees $1 billion atSydney, Australia-based Hunter Hall Investment Management, KrispyKreme's biggest shareholder with 5.3 million shares. "The mostimportant thing is that the special committee reports and thecompany reports its financial statements. Then we move on to thenext phase of the evolution of the company."

Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme -- http://www.krispykreme.com/-- is a leading branded specialty retailer of premium quality doughnuts, including the Company'ssignature Hot Original Glazed. Krispy Kreme currently operatesapproximately 400 stores in 45 U.S. states, Australia, Canada,Mexico, the Republic of South Korea and the United Kingdom.

* * *

Internal Investigation

As reported in the Troubled Company Reporter on May 2, 2005,Krispy Kreme Doughnuts, Inc., was unable to file its Form 10-K forthe fiscal year ended January 30, 2005, within the prescribed timeperiod and provided a financial update.

The Company is undergoing analysis related to the properapplication of generally accepted accounting principles to certaintransactions, which occurred in the fiscal year ended Feb. 1,2004, and earlier years as well as in fiscal 2005. Until thatanalyses are complete, the Company is unable to finalize itsfinancial statements for fiscal 2005. The Company's AuditCommittee and management have concluded that the Company'sfinancial statements for fiscal 2001, 2002 and 2003 and the firstthree quarters of fiscal 2005, in addition to the financialstatements for fiscal 2004, should no longer be relied upon.

In December 2004, the Company's Board of Directors concluded thatthe Company's previously issued financial statements for fiscal2004 should be restated to correct certain errors. The companyformed the special committee to investigate.

Lawsuits and Investigations

As reported in the Class Action Reporter on March 14, 2005, KrispyKreme workers, who say they lost retirement savings because theCompany executives hid evidence of declining sales and profits,have initiated a class action lawsuit in Greensboro federal court.

Court documents reveal that the suit was filed on behalf ofworkers who owned stock in the Company's retirement or stockownership plans after January 1, 2003, which was around the timethe Company's sales allegedly began to decline. Specifically,the workers are contending in their suit that because theexecutives said nothing about the Company's troubles, workerswho bought Krispy Kreme stock for their 401(k) accounts, or werepaid stock in bonus plans, had no way of knowing what thoseexecutives knew. Former chief executive officer ScottLivengood, who was forced out in January, is among those namedas defendants in the lawsuit.

As reported in the Troubled Company Reporter on Mar 23, 2005,Krispy Kreme Doughnuts, Inc.'s wholly owned subsidiary, KrispyKreme Doughnut Corporation, was served with a purported classaction lawsuit filed in the U.S. District Court for the MiddleDistrict of North Carolina that asserts claims under Section 502of the Employee Retirement Income Security Act against KKDC andcertain of its current and former officers, styled Smith v. KrispyKreme Doughnut Corporation et al., No. 1:05CV00187.

Company officers also were cooperating with the U.S. Attorney'sOffice for the Southern District of New York and the Securitiesand Exchange Commission in their separate investigations.

The affirmation follows the company's increase in the size of itssenior secured term loan B by $150 million, to $1.4 billion.While the 'BB' bank loan rating and '3' recovery rating on theloan (indicating the expectation for meaningful {50%-80%} recoveryof principal in the event of a payment default) were affirmed, therecovery rating is now considered a weak '3' with the additionalterm debt.

LifePoint will use the proceeds of this loan, along with a$192 million privately placed senior subordinated loan (unrated),to help refinance its existing convertible notes and finance ahospital acquisition. Pro forma for the transaction, debt will beapproximately $1.65 billion.

"The ratings on LifePoint are based on the company's aggressivegrowth strategy and moderately high leverage since the recentcompletion of the acquisition of Province Healthcare," saidStandard & Poor's credit analyst David Peknay. The closing ofthis acquisition in April 2005 strengthened the company's businessprofile and increased the size of its hospital portfolio to 50facilities from 30. The diversity of the portfolio improved, asthe company's largest state of operation, Kentucky, should nowgenerate less than 20% of revenues, where it previouslycontributed 30%.

Notwithstanding its reduced geographic and facility concentration,LifePoint's near doubling in size creates the challenge ofeffectively operating the much enlarged organization. The companyalso remains subject to uncertain third-party reimbursement,particularly in Kentucky and Tennessee, which together generatenearly one-third of revenues.

Lease-adjusted debt to EBITDA, which more than doubled to about3.6x with the Province transaction, will likely increase slightlymore, to about 3.7x, when the proposed acquisition of the DanvilleRegional Medical Center is completed. LifePoint's management hasbeen averse to such use of debt leverage in the past.

The rating incorporates Standard & Poor's expectation that thecompany's lease-adjusted debt to EBITDA will fall to about 3.5x bythe end of 2005, and to less than 3.5x in 2006. Return on capitalis expected to be about 15% for 2005. LifePoint's anticipatedbenefits from acquisition synergies, such as lower corporateoverhead costs, should help the company achieve these targets. Ifearnings fall or if cash flow is weak, management is expected toalter its plans accordingly to avoid a large amount of debt in thecapital structure.

LIFEPOINT HOSPITALS: Moody's Affirms Credit Facility's Ba3 Rating-----------------------------------------------------------------Moody's Investors Service affirmed the ratings of LifePointHospitals, Inc. following the announcement of a proposed $150million add-on term loan B. Moody's also withdrew the ratings onthe 4.50% convertible subordinated notes that were redeemedJune 15, 2005. The proceeds from the add-on term loan will beused, along with cash on hand, to finance the previously announcedacquisition of Danville Regional Medical Center (Danville).

The company also recently announced that it had entered into a$192 million senior subordinated credit facility, which has notbeen rated to fund the redemption of its convertible subordinatednotes.

Additionally, while results for the first quarter appear to showimprovement in bad debt expense and same-store admission growthtrends, it is not yet clear if these trends will be sustainable.

Following the acquisition of Province, the company will have:

* increased geographic and revenue diversification;

* increased scale that will allow the company to compete more effectively with other non-urban hospital players; and

* solid market share (92% sole community hospital providers).

The stable outlook reflects Moody's view that positive demographictrends will continue, and rates for Medicare reimbursement willremain stable in the near term. Moody's expects the company tohave good operating cash flow and free cash flow allowing for debtrepayment.

The announced transactions, a $150 million add-on term loan, a$192 million senior subordinated credit facility, and theredemption of $221 million of convertible subordinated debt,continue to add, although not significantly, to the company'soverall leverage.

The high leverage and the expectation that the company willcontinue with its strategy of acquiring non-urban, not-for-profithospitals are expected to constrain the already modest ratios ofadjusted cash flows from operations to adjusted debt and adjustedfree cash flow to adjusted debt. Therefore, an upgrade of theratings is not expected in the near term.

If the company experiences operating challenges caused bysoftening admission trends or adverse reimbursement developmentsand is not expected to attain and sustain ratios of adjustedoperating cash flow to adjusted debt and adjusted free cash flowto adjusted debt of 15% and 10%, respectively, there could bedownward pressure on the ratings.

Moody's would also likely downgrade the ratings if the companywere to make another debt financed acquisition or fail to rapidlyreduce leverage below current levels. Moody's is concerned thatLifePoint's acquisition strategy will focus on larger targets inthe future, as evidenced by the $235 million purchase price forthe 350 bed Danville facility, in order to continue to show thesame relative growth from acquisitions.

Pro forma for the Province and Danville acquisitions and a $40million agreement to lease Wythe County Community Hospital, fundedwith cash on hand, LifePoint would have had cash flow coverage ofdebt that is weak to moderate for the Ba3 category. Moody'sestimates that adjusted cash flow from operations to adjusted debtand adjusted free cash flow to adjusted debt would have beenapproximately 17% and 7%, respectively, for the twelve monthsended March 31, 2005. Moody's estimates that pro forma adjusteddebt to EBITDAR would have been approximately 3.7 times.

Moody's notes that the use of EBITDA and related EBITDA ratios asa single measure of cash flow without consideration of otherfactors can be misleading (see Moody's Special Comment, "PuttingEBITDA in Perspective," dated June 2000).

Moody's expects LifePoint to have good liquidity and does notexpect the company to draw on its $300 million revolving creditfacility to complete the announced transactions.

The senior secured credit facility is held at the level of thecorporate family rating due to its preponderance in the capitalstructure and the belief that total collateral value would notcover the level of debt. Ratings remain subject to final reviewof documentation by Moody's.

LifePoint Hospitals, Inc. operates 51 hospitals in non-urbancommunities with a total of 5,321 licensed beds. Combinedrevenues for the twelve months ended March 31, 2005 approximated$1,900 million.

The review of MMP's ratings is prompted by a preliminaryassessment that indicate that the assets acquired from Shell Oil,since closing in October 2004, are performing generally in linewith the company's initial forecasts.

Its other base assets (more than 80% of MMP's 2005 projectedoperating margin) are continuing their strong performance drivenby the results of Magellan Pipeline, its anchor asset(approximately 60% of the projected operating margin). We couldconsider MMH's ratings for possible downgrade and end the reviewof MMP's ratings for possible upgrade, should MMH implement a newterm loan that turns out to be significantly more liberal than thedraft terms we have reviewed.

Over the next couple of months, Moody's could upgrade MMP's seniorunsecured ratings to Baa3, subject to further analysis of thecompany's updated financial forecast and satisfactory progress inits operating and financial results in the third quarter towardits 2005 plan.

Moody's will assess the likelihood of MMP realizing the level ofincremental margins in the near term from a number of expansionprojects and commercial efforts under way on the Shell assets.The Shell acquisition had been fully valued in anticipation ofreturns on such projects. Growth capex on its base business inthe near-term is higher than we expected. (However, Moody's notethat the company has substantial cash and equivalents -- $136million at March 31, 2005 -- to help finance growth capex.)

Other factors in Moody's rating decision will be:

* the amount of implicit leverage that debt at MMH imparts on MMP, analyzing MMP and MMH on a consolidated basis;

* the degree of separateness MMP has from MMH from its partnership agreement and corporate governance practices; and

* the potential for dividend pressure on MMP from MMH for the latter's debt service and dividend needs.

Higher than expected leverage at MMH from the proposed refinancingcould preclude an upgrade of MMP's ratings.

Moody's had changed MMP's rating outlook from stable to a positiveon November 19 , 2004, shortly after the conclusion of its $543million acquisition of Shell Oil's Midwest products logisticssystem, and had indicated that an upgrade was possible if thecompany realized the incremental volumes and margins it initiallyhad forecast from the Shell assets. Based on the numbers for thefirst quarter, MMP's credit metrics so far remain on par withthose of its investment-grade MLP peers, with adjusted debt/grosscash flow at 4x.

Since its formation five years ago, the company has:

* gained critical mass and adequate liquidity of its securities;

* re-capitalized more suitably as an investment-grade credit by eliminating secured debt; and

* accrued a track record of sound financial policy.

It ended its affiliation with its original GP sponsor The WilliamsCompanies, Inc. in a credit-neutral manner, and now has someexperience under MMH's sponsorship. The company has shown aconsistent strategic focus on product pipelines and terminals.These assets have low business risk relative to the investment-grade MLP peer group.

Rating Actions on MMH

The affirmation of MMH's Ba3 senior secured rating reflectsMoody's view that ongoing organic credit accretion is unlikely,given the likelihood that it will re-leverage from time to time toaccelerate the sponsors' returns and to adjust for an increase inits expected cash inflows and decrease in debt from mandatory pre-payments.

A corporate family rating, on par with MMH's senior secured bankloan rating is assigned, because the collateral for loan is MMH'sGP interests, which comprise its sole asset and value of theenterprise. MMH's issuer rating is withdrawn, following the saleof MMH's remaining MMP LP interests this month.

This sale eliminated the need for us to have a senior unsecuredissuer rating (denoting MMH's un-enhanced debt service capacity),separate from the secured rating enhanced by highly liquidcollateral (publicly-traded MMP LP interests).

MMH's ownership by private equity firms makes it likely that itwill keep a fair amount of leverage over time. MMH did aleveraged distribution in the last refinancing of its term loan inDecember 2004. In six months, MMH paid down this loan from $250million initially to $100 million currently, resulting in thecompany's considering re-leveraging with the proposed term loan.

Net proceeds from the proposed term loan, after repaying theexisting loan, will be used to make a distribution to MMH'sowners, as with its previous loans, allowing MMH to realizeupfront the value of GP distributions forecast over the next fewyears.

Otherwise, MMH's owners will receive little in way ofdistributions during this period, since the cash sweep mechanismunder the term loan (similar to those in its 2 previous termloans) requires MMH to use half of its free cash flows for debtrepayment rather than for distributions. This is particularlytrue, since, with the sale of last of its LP units, MMH no longerhas liquid assets to sell to generate additional cash for debtrepayment or distributions.

On a standalone basis, our MMH's ratings anticipate a limitedrange of future re-leveraging. They accommodate a temporary spikein debt/gross cash flow (GP distributions received) of no higherthan 8x following a re-leveraging (vs. 6.0x at 1Q05), so long asthere is a high likelihood that it will be reduced speedily fromincremental cash flow (most likely from a new investment at MMP)to run-rates of around 6x at most.

So long as the company does not exceed the 6x threshold, theproposed term loan allows it to borrow up to an additional $100million under an accordion feature. MMH's ratings assume grosscash flow/interest at no lower than the mid-1x range (2.3x at1Q05).

MMH's standalone metrics will be monitored in conjunction withconsolidated metrics for the Magellan companies. Comparing thedebt of MMP and MMH against MMP's cash flows (the sole source ofMMH's cash flows), Magellan's consolidated leverage (MMP+MMHdebt/MMP EBITDA quarterly annualized of 3.3x at 1Q05) is currentlylower than those of other MLPs sponsored by financial investors,because MMP has relatively less leverage.

MMH's ratings assume MMP/MMH's consolidated leverage in the low 4xrange and consolidated interest coverage (MMP EBITDA/MMP+MMHinterest) of about 4x (it was 4.5x in 1Q05). Significantdeviation from the above ranges will cause us to re-assess theratings of not only MMH but also MMP.

Headquartered in Tulsa, Oklahoma, Magellan Midstream Partners,L.P. is an MLP that is engaged in the transportation, storage, anddistribution of:

* refined petroleum products, * crude oil, and * ammonia.

Magellan Midstream Holdings, L.P. is a limited partnershipprimarily between Madison Dearborn Capital Partners IV, L.P. andCarlyle/Riverstone MLP Holdings, L.P. that own general partnerinterests representing about 2% of the MLP.

Official creditors' committees have the right to employ legal andaccounting professionals and financial advisors, at the Debtors'expense. They may investigate the Debtors' business and financialaffairs. Importantly, official committees serve as fiduciaries tothe general population of creditors they represent. Thosecommittees will also attempt to negotiate the terms of aconsensual chapter 11 plan -- almost always subject to the termsof strict confidentiality agreements with the Debtors and othercore parties-in-interest. If negotiations break down, theCommittee may ask the Bankruptcy Court to replace management withan independent trustee. If the Committee concludes reorganizationof the Debtors is impossible, the Committee will urge theBankruptcy Court to convert the chapter 11 cases to a liquidationproceeding.

MANUFACTURING TECHNOLOGY: Files Schedules of Assets & Liabilities-----------------------------------------------------------------Manufacturing Services, Inc., delivered its Schedules of Assetsand Liabilities to the U.S. Bankruptcy Court for the District ofPuerto Rico, disclosing:

* the credit quality of the loans; * the structural and legal protections; and * on the protection from subordination.

The ratings of the subordinate certificates are based on thesubordination of the respective certificates.

The securitization is backed by multiple originators' fixed-rateAlt-A mortgage loans with a weighted-average FICO of 687 and anaverage loan-to-value ratio of approximately 81%. Moody's expectslosses on the collateral to range between 1.00% and 1.30%.

MASTR ALTERNATIVE: Moody's Rates Class B-4 2005-3 Certs. at Ba2---------------------------------------------------------------Moody's Investors Service assigned Aaa ratings to the non-residual, senior certificates issued by MASTR Alternative MortgageTrust 2005-3, and ratings ranging between of A2 and Ba2 to certainsubordinate certificates in the deal. The Aaa ratings of thecertificates are based primarily on:

* the credit quality of the loans; * the structural and legal protections; and * on the protection from subordination.

The securitization is backed by multiple originators' fixed-rateAlt-A mortgage loans with a weighted-average FICO of 718 and anaverage loan-to-value ratio of approximately 73%.

On May 19, 2005, Maytag entered into a definitive agreement to beacquired by a private investor group led by Ripplewood HoldingsLLC for $14 per share cash. Fitch originally placed Maytag onRating Watch Negative on May 20, affecting approximately $976million of the company's senior unsecured notes.

According to the preliminary non-binding proposal, completion ofdue diligence is expected to take six-to-eight weeks, and theproposal is conditioned, among other things, on the due diligence,along with the negotiation of a definitive agreement and necessaryapprovals. The proposal contemplates debt financing provided byMerrill Lynch & Co. on terms and conditions to be agreed uponamong Merrill Lynch, Bain, Blackstone and Haier America.

Deephaven believes that the revoked $9.74 billion bid from QwestCommunications International, Inc., would be in the interest ofMCI stockholders.

The Wall Street Journal reports that several large hedge fundsintend to give their proxy votes to Deephaven, but will revokethem if Qwest doesn't come up with a new offer.

"If Qwest told shareholders of MCI 'if you reject the deal, wewill come to you with this offer,' Verizon will not get the vote,"Leon Cooperman of Omega Advisors told Jesse Drucker of TheJournal. "If, on the other hand, I am asked to withhold my votewith no specific proposal, I'm voting for Verizon. It's as simpleas that." Mr. Cooperman owns about 3% of MCI shares.

Deephaven has retained D.F. King & Co., Inc., to solicit proxiesfrom other MCI shareholders. Deephaven has agreed to reimburseD.F. King for its reasonable expenses; to indemnify it againstcertain losses, costs and expenses; and to pay it fees inconnection with the proxy solicitation. Deephaven expects to payD.F. King fees not exceeding $250,000 in connection with the proxysolicitation.

MCI has not yet announced a date for the meeting to vote onVerizon's offer. Deephaven says it will use the proxies it getswhenever the meeting may be held.

A full-text copy of Deephaven's Proxy Statement is available atthe Securities and Exchange Commission at:

Headquartered in Clinton, Mississippi, WorldCom, Inc., now knownas MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries andmaintaining one of the most expansive IP networks in the world.The Company filed for chapter 11 protection on July 21, 2002(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, theDebtors listed $103,803,000,000 in assets and $45,897,000,000 indebts. The Bankruptcy Court confirmed WorldCom's Plan onOctober 31, 2003, and on April 20, 2004, the company formallyemerged from U.S. Chapter 11 protection as MCI, Inc. (WorldComBankruptcy News, Issue No. 93; Bankruptcy Creditors' Service,Inc., 215/945-7000)

* * *

As reported in the Troubled Company Reporter on March 1, 2005,Standard & Poor's Ratings Services placed its ratings on Denver,Co.-based diversified telecommunications carrier QwestCommunications International, Inc., and subsidiaries, includingthe 'BB-' corporate credit rating, on CreditWatch with negativeimplications. This follows the company's counter bid to VerizonCommunications, Inc., for long-distance carrier MCI, Inc., for$3 billion in cash and $5 billion in stock. MCI also has about$6 billion of debt outstanding.

The ratings on MCI, including the 'B+' corporate credit rating,remain on CreditWatch with positive implications, where they wereplaced Feb. 14, 2005 following Verizon's announced agreement toacquire the company. The positive CreditWatch listing for the MCIratings reflects the company's potential acquisition by eitherVerizon or Qwest, both of which are more creditworthy entities.However, the positive CreditWatch listing of the 'B+' rating onMCI's senior unsecured debt assumes no change to the current MCIcorporate and capital structure under an assumed acquisition byQwest, such that this debt would become structurally junior toother material obligations.

"The negative CreditWatch listing of the Qwest ratings reflectsthe higher business risk at MCI if its bid is ultimatelysuccessful," explained Standard & Poor's credit analyst CatherineCosentino. As a long-distance carrier, MCI is facing ongoingstiff competition from other carriers, especially AT&T Corp.Moreover, MCI is considered to be competitively disadvantagedrelative to AT&T in terms of its materially smaller presence inthe enterprise segment and fewer local points of presence -- POPs.The latter, in particular, results in higher access costs relativeto AT&T. Qwest also faces the challenge of integrating andstrengthening MCI's operations while improving its ownunderperforming, net free cash flow negative long-distancebusiness. These issues overshadow the positive aspects of Qwest'sincumbent local exchange carrier business that were encompassed inthe former developing outlook.

As reported in the Troubled Company Reporter on Feb. 22, 2005,Moody's Investors Service has placed the long-term ratings of MCI,Inc., on review for possible upgrade based on Verizon's plan toacquire MCI for about $8.9 billion in cash, stock and assumeddebt.

As reported in the Troubled Company Reporter on Feb. 22, 2005,Standard & Poor's Ratings Services placed its ratings of Ashburn,Virginia-based MCI Corp., including the 'B+' corporate creditrating, on CreditWatch with positive implications. The actionaffects approximately $6 billion of MCI debt.

As reported in the Troubled Company Reporter on Feb. 16, 2005,Fitch Ratings has placed the 'A+' rating on Verizon GlobalFunding's outstanding long-term debt securities on Rating WatchNegative, and the 'B' senior unsecured debt rating of MCI, Inc.,on Rating Watch Positive following the announcement that VerizonCommunications will acquire MCI for approximately $4.8 billion incommon stock and $488 million in cash.

MEDEX INC: Smiths Purchase Cues Moody's to Withdraw Debt Ratings----------------------------------------------------------------Moody's has withdrawn the ratings of Medex, Inc. following theacquisition of the company by Smiths Group plc (rated A3) and theexpiration of the tender offer for the company's outstanding8.875% senior subordinated notes. The company no longer has anydebt rated by Moody's.

Medex is a global manufacturer and marketer of critical care andalternate care medical products used in both acute and alternatecare settings for a variety of therapeutic, diagnostic and long-term procedures. Medex markets and sells critical care systemsand products to over 5,500 hospitals, health care systems, andalternate healthcare settings in more than 75 countries through aglobal sales force and distribution network. The company wasacquired by Smiths Group PLC on March 21, 2005, and is now awholly-owned subsidiary of Smiths Group.

Smiths Group designs and manufactures safety-critical systems andproducts, and has market leading positions in:

MERIDIAN AUTOMOTIVE: Deutsche Bank Offers $75 Mil. DIP Financing----------------------------------------------------------------As previously reported, Meridian Automotive Systems, Inc., and itsdebtor-affiliates did not proceed with the $375,000,000 financingfacility with JPMorgan Chase Bank, N.A., as the AdministrativeAgent, after certain of the Debtors' original equipmentmanufacturers proposed curtailments in production that areprojected to take effect primarily in the Fourth Quarter 2005.

The Debtors decided to restructure their proposed DIP Financing toaccommodate any potential impact on their earnings. The Debtors,however, obtained authority from the U.S. Bankruptcy Court for theDistrict of Delaware to use $30,000,000 from the JPMorgan Facilitythrough June 30, 2005, while they sought new, permanent financing.

The Debtors have concluded that any new financing would not besized adequately to allow repayment of the $310 million ofobligations outstanding under the First Lien Credit Agreement,but would instead be tailored more narrowly to supplement theDebtors' current liquidity resources.

The Debtors have had negotiations with Credit Suisse FirstBoston, the First Lien Administrative Agent for the First LienSecured Lenders, regarding the terms for a new financingfacility. The Debtors, however, find CSFB's terms unacceptable.At this time, no agreement between the Debtors and the First LienAdministrative Agent has been reached. Thus, the Debtors havehad no alternative but to contact potential financing sourcesother than CSFB.

Deutsche Bank Trust Company Americas submitted an initialproposal to provide financing. Subsequently, the parties engagedin extensive negotiations that culminated in a proposal toprovide up to $75 million of secured financing, inclusive of aletter of credit facility. After carefully evaluating variousfinancing proposals received, the Debtors concluded that DeutscheBank's offer was superior.

The principal provisions of the Deutsche Bank Facility are:

A. Borrowers

Meridian Automotive Systems - Composite Operations, Inc., and each of its affiliated Debtors.

B. Guarantors

The Debtors' existing and future domestic subsidiaries.

C. Agent & Banks

A syndicate of financial institutions and other accredited investors, including Deutsche Bank as DIP Agent, to be arranged by Deutsche Bank Securities, Inc., as sole lead arranger and book manager.

D. Commitment

Revolving credit facility and letter of credit subfacility in an original principal amount of up to $75,000,000.

E. Closing Date

Not later than June 30, 2005.

F. Purpose

Initial proceeds would be used on the Closing Date to fund:

(i) any outstanding fees and expenses under the Existing DIP Facility and the payment in full of all amounts borrowed under the Existing DIP Facility;

(ii) the fees and expenses associated with the Deutsche Bank Facility, as agreed by the Credit Parties; and

(iii) other amounts described in a budget as being paid on the Closing Date, including certain adequate protection payments.

Thereafter, Loan proceeds will be used to fund the Debtors' general corporate and working capital requirements.

G. Term

Eighteen months after the Closing Date.

H. Security

All of the Credit Parties' obligations will at all times, subject to the Carve-Out, be:

(ii) secured by a perfected first priority lien in favor of Deutsche Bank on behalf of the DIP Lenders on all the Credit Parties' property that is not subject to valid, perfected and non-avoidable liens;

(iii) secured by a perfected junior lien in favor of Deutsche Bank on behalf of the DIP Lenders on all the Credit Parties' property that is subject to valid, perfected and non-avoidable liens in existence on the Petition Date other than liens held by the Prepetition Secured Creditors; and

(iv) secured by perfected first priority, senior priming security interests and liens in favor of Deutsche Bank on behalf of the DIP Lenders in all of the Credit Parties' presently encumbered property.

I. Carve-Out

The superpriority claims and postpetition liens in favor of Deutsche Bank will be subject to:

(i) in the event of the occurrence and during the continuance of an Event of Default, the payment of allowed and unpaid professional fees and disbursements incurred by the Debtors and the Official Committee of Unsecured Creditors in an aggregate amount not in excess of $5,000,000, plus all unpaid professional fees and disbursements incurred prior to the occurrence of an event of Default; and

Commitment fees equal to 0.50% per annum times the daily average unused portion of the DIP Facility will accrue from the Closing Date, will be computed on the basis of a 360-day year and will be payable monthly in arrears during the term of the Deutsche Bank Facility and on the maturity or termination of the DIP Facility;

K. Letter of Credit Fees

Letter of credit fee equal to the applicable margin for Eurodollar Rate Loans under the DIP Facility, will be payable to Deutsche Bank, and a fronting fee with respect to L/Cs equal to the greater of $500 per annum and 0.25% per annum, will be payable to the DIP Lender issuing the L/C.

Customary drawing and administration fees will be charged by each issuing DIP Lender.

L. Interest Rates

At the Debtors' option, the adjusted Eurodollar Rate plus 3% per annum or Base Rate plus 2% per annum on the daily outstanding balance.

M. Default Interest

After the occurrence and during the continuance of an Event of Default, interest on the Loans will bear interest at a rate equal to 2% per annum plus the otherwise applicable rate.

N. Events of Default

The Events of Default, subject to customary and appropriate grace periods, include without limitation:

MERIDIAN AUTOMOTIVE: Can Pay $300,000 Work Fee to Deutsche Bank---------------------------------------------------------------Meridian Automotive Systems, Inc., and its debtor-affiliates seekauthority from the U.S. Bankruptcy Court for the District ofDelaware to pay Deutsche Bank Trust Company Americas a $300,000non-refundable work fee to defray the costs and expenses DeutscheBank incurred in evaluating, preparing and submitting apostpetition financing proposal.

Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP,in Wilmington, Delaware, explains that in pursuing a financingpackage with the Debtors in the limited time available, DeutscheBank devoted intensive time and resources to due diligence and tothe legal, financial and other preparatory work attendant tosubmission of a definitive financing package.

"Understandably, Deutsche Bank does not wish to undertake acostly and accelerated work schedule to achieve a final financingpackage if it must bear all of the execution risk attendant toits deal not closing. . . ." Mr. Brady says.

Deutsche Bank notified the Debtors that its willingness tocomplete its due diligence and underwriting process isconditioned on the Debtors' payment of the Work Fee.

Any portion of the Work Fee in excess of the fees and expensesincurred by Deutsche Bank as of the closing will be creditedagainst other facility fees payable to the DIP Agent, if theproposed DIP Facility is closed. Similarly, if the DIP Financingis not consummated and Deutsche Bank has incurred reasonable feesand expenses in excess of the Work Fee, the Debtors will supportpayment of the excess amounts as administrative expenses.

Committee Responds

Given the accelerated time frame within which Deutsche Bank mustcomplete its due diligence and consummate the proposedreplacement facility, the Official Committee of UnsecuredCreditors believes the $300,000 is appropriate to be paid as theWork Fee. The Committee agrees that the Deutsche Bank Facilityis superior to all other proposals received by the Debtors todate.

The Committee, however, reserves its right to object to theallowance of any amounts in excess of the $300,000 Work Fee tothe extent the amounts are not reasonable.

* * *

Judge Walrath authorizes the Debtors to pay the $300,000 Work Feeto Deutsche Bank.

MERIDIAN AUTOMOTIVE: Wants to Release JPMorgan From Claims----------------------------------------------------------Meridian Automotive Systems, Inc., and its debtor-affiliates askthe U.S. Bankruptcy Court for the District of Delaware forauthority to release JPMorgan Chase Bank, M.A., as administrativeagent, and the existing lenders under the Revolving Credit, TermLoan and Guaranty Agreement dated as of April 28, 2005, from allclaims and causes of action.

Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP,in Wilmington, Delaware, explains that the termination of allliens and security interests in favor of JPMorgan and theexisting DIP Lenders is a condition precedent to theeffectiveness of the $75 million DIP financing facility withDeutsche Bank Trust Company Americas, as agent. The Releaseincludes a waiver of potential causes of action belonging to theDebtors' estates.

At the May 26, 2005 hearing, certain parties have expressly"reserved their rights" to bring claims against JPMorgan and theexisting DIP Lenders. Mr. Morton relates that the Lenders arenot willing to consensually release their liens and claimsagainst the Debtors unless the DIP Order is modified to includethe Release.

MIRANT: MAGi Panel Presents Issues on Impairment Order Appeal-------------------------------------------------------------On June 9, 2005, Judge Lynn sent out a report in relation to theAppeals taken by the Official Committee of Unsecured Creditors ofMirant Americas Generation, LLC, and the Ad Hoc Committee of MAGBondholders from the Bankruptcy Court's Order finding that MAGi'sLong-Term Noteholders are not impaired. Mirant AmericasGeneration, LLC, is a Mirant Corporation debtor-affiliate.

In his Report, Judge Lynn offered his observations:

-- to aid the District Court in assessing the likelihood that granting the MAGi Committee and the Ad Hoc Committee's Appeal requests would delay confirmation of the Plan; and

-- to assist the District Court in establishing any expedited briefing schedule on appeal.

According to Judge Lynn, "hearing on the Debtors' disclosurestatement will be deferred . . . until I complete a valuationhearing now in progress. I do not expect I will be able tocomplete that hearing and issue a ruling on valuation prior toJune 23. I do not, therefore, believe the disclosure statementhearing could be concluded and a ruling on disclosure made beforeJuly 15."

"This would indicate that a confirmation hearing on the Plan. . . would not be commenced earlier than the second half ofSeptember."

"If the [MAGi Committee and the Ad Hoc Committee's] requests aregranted, it may be the best course not to conduct the hearing onthe disclosure statement, and certainly would be necessary not tocommence a confirmation hearing, until after a ruling on theappeal by the District Court."

Appellants Deliver Statement of Issues

The Official Committee of Unsecured Creditors of Mirant AmericasGeneration, LLC, present to the District Court 12 issues to beresolved on appeal:

1. Did the Bankruptcy Court err in not concluding that the Debtors' proposed substantive consolidation of MAGi and its subsidiaries is a transfer of MAGi's assets "substantially as an entirety" under Sections 801 and 802 of the Indenture?

2. Did the Bankruptcy Court err in not concluding that the transfer of MAGi's direct equity interest in MIRMA is a transfer of MAGi's assets "substantially as an entirety" under Section 801 of the Indenture?

3. Did the Bankruptcy Court err in concluding that the substantive consolidation of MAGi and its subsidiaries is not a merger or consolidation of MAGi pursuant to Sections 801 and 802 of the Indenture?

4. Did the Bankruptcy Court err in concluding that the merger of MAGi's subsidiaries is not a transfer of MAGi's assets "substantially as an entirety" under Sections 801 and 802 of the Indenture?

5. Did the Bankruptcy Court err in not concluding that the transfer of MIRMA is prohibited by Section 110 of the Supplemental Indentures?

6. Did the Bankruptcy Court err in failing to conclude that the substance of the transaction by which MIRMA is transferred to New MAG Holdco and subsequently encumbered by liens to secure the Exit Financing violates Section 109 of the Indenture?

7. Did the Bankruptcy Court err in concluding that MAGi's failure under the Indenture to comply with the financial reporting requirements of Section 1005 of the Indenture is not a material default?

8. Did the Bankruptcy Court err in ascribing any significance to whether MAGi's undisputed failure to comply with the financial reporting requirements of Section 1005 of the Indenture is a "material default", when the cure requirements of Section 1124 of the Bankruptcy Code are not limited to "material defaults"?

9. Did the Bankruptcy Court err in concluding that the cross- default of indebtedness defaults under the Indenture are cured by the Plan?

10. Did the Bankruptcy Court err in concluding that, in the case of a continuing default, if a creditor's rights respecting that a default are preserved so that, post- confirmation, the creditor may act on the continuing default, failure to cure does not impair the creditors' rights?

11. Did the Bankruptcy Court err in concluding that Section 1124(2)(D) of the Bankruptcy Code does not confer an equitable right requiring a Plan to be fundamentally fair to the creditors to be reinstated?

12. Did the Bankruptcy Court err in not concluding that the release of claims against third parties and the Debtors and the related injunctions contained in the Plan do not alter creditors' rights?

The Ad Hoc Committee of Bondholders of Mirant AmericasGeneration, LLC, asks the District Court to review:

1. Whether the Bankruptcy Court erred in ruling that the Long- term Noteholders are not entitled to vote on the Plan, even though the Court determined that it lacked sufficient facts to conclude that the Debtors had carried their evidentiary burden of proving that the Long-Term Noteholders' rights were unimpaired under Section 1124 of the Bankruptcy Code.

2. Whether the Bankruptcy Court erred in concluding that, even though the Plan plainly alters the Long-term Noteholders' legal and equitable rights, the Plan does not impair the Long-term Noteholders' claims and interests, because it purportedly does not trigger a technical default or fail to cure an existing default under the Indentures.

3. Whether the Bankruptcy Court erred in disregarding basic principles of contract interpretation in holding that the proposed Plan provisions do not violate the Indentures.

4. Whether the Bankruptcy Court erred in concluding that the Plan can provide for the substantive consolidation of the Debtors without impairing the Long-term Noteholders' claims and interests.

5. Whether the Bankruptcy Court erred in its interpretation and application of the "cure" provisions of Section 1124 of the Bankruptcy Code, by concluding:

(a) that the Debtors are not required to cure defaults under the Indentures before the effective date of the Plan; and

(b) that cross-defaults under the Indentures are cured by confirmation of the Plan.

The Debtors ask Judge Lynn to approve the Settlement Agreement.Headquartered in Atlanta, Georgia, Mirant Corporation --http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean,and the Philippines. Mirant owns or leases more than 18,000megawatts of electric generating capacity globally. MirantCorporation filed for chapter 11 protection on July 14, 2003(Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White &Case LLP, represents the Debtors in their restructuring efforts.When the Debtors filed for protection from their creditors, theylisted $20,574,000,000 in assets and $11,401,000,000 in debts.(Mirant Bankruptcy News, Issue No. 67; Bankruptcy Creditors'Service, Inc., 215/945-7000)

The review was prompted by Walter Industries, Inc.'s ("WalterIndustries" -- Ba2 Corporate Family rating, formerly known assenior implied rating) announcement that it has entered into adefinitive agreement to purchase Mueller Water Products, Inc. forapproximately $1.91 billion.

The consideration will consist of approximately $860 million incash and the assumption of approximately $1.05 billion in Muellerdebt. The transaction is expected to be completed in the thirdquarter of 2005.

Walter Industries plans to combine its U.S. Pipe business withMueller, creating a separate wholly-owned public reportingsubsidiary with $1.68 billion of pro forma revenues. The ratingsaction recognizes that the pro forma leverage of the combinedentity will significantly exceed Mueller's current debt load.Specifically, pro forma debt increases to $1.55 billion from $1.05billion (pro forma amount assumes a portion of Mueller's debt isrefinanced).

U.S. Pipe adds a moderate amount of EBITDA ($45 million) relativeto $500 million of additional acquisition-related debt. Moody'splans to meet with Walter Industries' management in the short-termto further analyze if Mueller debt holder's position will bematerially changed, post-acquisition. Walter Industries has statedthat downstream guarantees would not be provided to Mueller's debtholders and that it will likely tender for Mueller's $100 millionsecond lien secured notes this year, while leaving the seniorsubordinated notes and discount notes in place.

The review will focus on the details of the financing forcompleting the transaction, including the anticipated terms of theacquisition-related debt. Moody's will also review the potential$25 to $35 million of synergies to be realized between thebusinesses, and the combined company's financial flexibility andliquidity. Most importantly, Moody's will examine the combinedcompany's ability to generate free cash flow and reduce theadditional acquisition related-debt.

The ratings are being assigned in conjunction with Mylan's recentannouncement that it will perform a partial recapitalizationinvolving share repurchases of approximately $1.25 billion. Mylanhas announced that it will use approximately $500 million ofexisting cash and $775 million of new debt to fund thetransaction.

Moody's understands that both the senior secured bank creditfacilities and the senior unsecured notes are to be guaranteed byeach of Mylan's direct and indirect wholly owned domesticsubsidiaries (other than an insurance subsidiary). The bankcredit facilities are secured by a perfected lien on and pledge ofall of the capital stock of each direct and indirect subsidiaries(limited to 65% of the voting stock of foreign subsidiaries).

However, Moody's does not currently believe the difference inestimated recovery levels for unsecured note holders issignificant enough to warrant different ratings. This beliefconsiders Mylan's enterprise value in relation to its debt, itscurrent rating level, as well as the subsidiary guaranteesprovided to unsecured note holders. As a result, Moody's isassigning Ba1 ratings to both the senior secured bank facility andthe senior unsecured notes.

The ratings of the proposed bank facility and senior notes reflectMoody's understanding of the transaction terms as contemplated,and are subject to final documentation.

Mylan's SGL-1 liquidity rating reflects Moody's belief that Mylanwill have a high degree of liquidity after the transaction. Mylanhas a long history of internally funding capital expenditures anddividends without reliance on debt, and Moody's expect positivefree cash flow to continue.

Moody's expects that Mylan will maintain cash balances of severalhundred million dollars, and additional liquidity is provided bythe $200 million credit facility, expected to be undrawn at theclose of the transaction. Moody's anticipate ample headroom underthe financial covenants.

The Ba1 ratings reflect Moody's assumption that Mylan's cash flowduring the current fiscal year ending March 31, 2006 will improvecompared to fiscal year 2005 levels, driven in part by sales oftransdermal fentanyl, which Mylan launched in January 2005. TheBa1 ratings also reflect the expectation that Mylan will utilize aportion of its free cash flow to deleverage over the next severalyears. These factors are discussed in greater depth below.

Moody's has assigned Mylan's ratings in the context of Moody'sGlobal Pharmaceutical Rating Methodology, published in November2004. The published methodology is oriented more towards brandedpharmaceutical companies.

In applying the rating methodology to generic drug companies,Moody's therefore expects financial metrics to be sustainable atthe higher end of the ranges indicated. Within the broad "Ba"rating category, Moody's expects cash flow from operations toadjusted debt of 15-25%, and free cash flow to debt of 10-15%.

* its investment in generic R&D, which has led to successful product launches.

Rising demand for generic drugs should be fueled by upcomingblockbuster patent expirations, ongoing cost containmentpressures, and the Medicare drug benefit, which becomes effectivein 2006. Mylan has several near-term potential opportunities fromFirst-to-File Paragraph-IV patent challenges, including topiramateand levofloxacin, which could result in launches in late fiscalyear 2006 or fiscal year 2007.

Longer term, Mylan's Nebivolol branded product for hypertensionand potentially for congestive heart failure also presents upsideopportunity. Mylan recently announced it would seek a strategicpartner to market the product. Moody's believes this strategy isless risky than building or acquiring a sales force. Nebivolol'sFDA approval and market acceptance remain uncertain, however.

Offsetting these strengths, Moody's has several concerns about thegeneric drug industry, which has faced intensifying competition,margin erosion, and reduced opportunities for 6-month exclusivelaunches because of the "authorized generics" strategy of brandedcompanies. Existing products of most generic companies facedeclining sales over time because of new entrants and pricingerosion, but the level of erosion is difficult to forecast. Newproduct launches may offset these sales declines.

However, limited pipeline visibility, and a reliance on successfulpatent challenges make these sales difficult to predict as well.Overall, Moody's believes that the sustainability of revenues andcash flow are much less certain compared to a typical brandedpharmaceutical company, especially over a period longer than oneyear.

Mylan has been affected by these challenges, with a revenuedecline of 8% in fiscal year 2005 and gross margin contractionfrom 56% in fiscal year 2004 to 50% in fiscal year 2005.

In addition, Moody's believes that Mylan is at somewhat of acrossroads in its strategy. The proposed acquisition of KingPharmaceuticals last year represented a departure from Mylan'sformer strategy. King operates in the branded drug industry, andmaintains a salesforce that markets products to physicians.

Now that the King acquisition agreement has been terminated,Mylan's strategy involves refocusing on its generics business.Mylan's financial policies have also changed, evidenced by therecapitalization strategy and the assumption of financialleverage. An unresolved purported offer for the company from oneof its shareholders adds additional uncertainty about changes infinancial policy.

On a reported basis, Mylan's cash flow from operating activitiesdeclined from $226 million in fiscal year 2004 to $204 million infiscal year 2005. Moody's adjusts Mylan's fiscal year 2005 cashflows by removing $17 million of litigation payments received,deducting an estimated $20 million of interest cost (net of taxes)for the new debt being issued, and adding back approximately $25million of one-time expenses related to the proposed Kingacquisition.

These adjustments result in adjusted cash flow from operatingactivities of $192 million during fiscal year 2005, and adjustedfree cash flow (after dividends and capital expenditures) of $69million. Using estimated debt of $789 million pro forma for thetransaction ($775 million of debt and $14 million to represent thepresent value of operating leases), pro forma cash flow fromoperations to adjusted debt was approximately 24%; free cash flowto adjusted debt was approximately 9%.

The pro forma free cash flow ratio is below the level Moody'swould expect for Mylan's Ba1 rating. Mylan's cash flow in fiscalyear 2005 was negatively affected by large sales of transdermalfentanyl in the fourth quarter, which led to a substantialincrease in accounts receivable balances. Moody's believes thatfuture product launches of size could similarly affect Mylan'scash flow.

In assessing the prospects for Mylan's future cash flow, Moody'sconsidered the revenue and gross profit from Mylan's portfolio ofexisting products, and the potential from its pipeline products.For existing products, key projection assumptions include:

* the number of competitors currently; * potential future competitors; and * the rate of market share erosion and gross margin erosion.

For pipeline products, these same assumptions are necessary aswell as additional assumptions regarding timing of launch andwhether or not there will be an "authorized generic." Launchtiming may depend on either Mylan or a different generic companyprevailing in a patent lawsuit. Because of the multitude ofassumptions, the predictability and sustainability of Mylan's cashflows is somewhat uncertain, arguing for financial metrics at thehigh end of the ranges specified in Moody's rating methodology.

Under Moody's baseline scenario, the rating agency currentlyproject cash flow from operations in the range of $200 to $300million for both fiscal year 2006 and fiscal year 2007, and freecash flow in the range of $50 million to $150 million each year.These estimates could be subject to variability, however, based ondeviation from the assumptions discussed. Higher ratings could beattained with a faster launch, the absence of an authorizedgeneric, or delays in other generic companies launching products.Lower ratings could become probable if competitive conditionsexacerbate and faster price erosion occurs, or if brand companiesprevail in patent challenge cases.

To maintain the Ba1 ratings, Moody's expects Mylan to sustain cashflow from operations to adjusted debt of 25% to 35%, and free cashflow to adjusted debt of 10% to 20%.

The ratings could face upward pressure if Mylan exceeds theseranges, and Moody's believes the improvement is sustainable. Toconsider an upgrade to Baa3, Moody's would expect cash flow fromoperations sustainable at approximately 40% and free cash flowsustainable at approximately 25%, i.e. the high end of the rangesoutlined for the "Baa" category in Moody's methodology.

Conversely, the ratings could face downward pressure if Mylan'smetrics fall below the stated ranges. This could occur ifcompetitive pressures in the generic drug industry intensify, orif Mylan is not successful in launching new products to offsetsales erosion of its existing products.

Headquartered in Canonsburg, Pennsylvania, Mylan Laboratories Inc.is a pharmaceutical company. During the fiscal year ended March31, 2005, Mylan reported net revenue of $1.25 billion, of which81% was attributable to its generic drug segment.

The new notes will partly fund the recent purchase of the companyby Odyssey Investment Partners in a transaction that was valued atabout $500 million. The purchase was partly funded with unratedfinancing, including a new $225 million asset-backed lendingfacility and $80 million of privately placed subordinated notes.

"There has been an improvement in industry fundamentals reflectedin Neff's operations, and the company's EBITDA has grownconsiderably," said Standard & Poor's credit analyst John R. Sico.

"Standard & Poor's expects some further industry improvement inthe near term. Rental rates have recently increased, a trend thatcontinued through the first quarter of 2005. Also, the oversupplyof construction equipment has diminished, following theindustrywide practice that deliberately aged fleets and reducedcapital spending. The industry has also benefited from higherutilization rates. Nonresidential construction spending began torecover in 2004 after declining about 20% from 2000 to 2003. Thisspending has increased modestly so far in 2005, and it is expectedto improve seasonally. We expect a tempered pace of recovery inthe second half," Mr. Sico added.

The increases in rental rates and equipment utilization havehelped Neff. The company's sales improved about 20% in 2004, andadjusted EBITDA margins are now more than 30%. Credit protectionmeasures have also improved. The company has held down itscapital spending and generated positive free cash flow (aftercapital spending and net of equipment sales).

However, the aging of its fleet, especially its core earthmovingequipment, has moderately increased maintenance and repair costs.Such aging also eventually leads to increased capital spending.Given the improved industry conditions and higher rentalutilization, fleet modernization is in order.

Neff is expected to continue to improve its operating efficiencyand focus on organic growth. These tendencies should help thecompany keep its credit metrics within Standard & Poor'sexpectations -- total debt to EBITDA of about 4.5x-5x over thebusiness cycle and EBITDA (less capital expenditures) to cashinterest coverage of about 1.5x (adjusted for operating leases).

NORCROSS SAFETY: Moody's Junks Proposed $128.7M Fixed Rate Notes----------------------------------------------------------------(June 21, 2005)Moody's Investors Service affirmed the ratings of Norcross SafetyProducts L.L.C., a leading manufacturer of personal protectionequipment, following the recent announcement of its acquisition byOdyssey Investment Partners LLC, a private equity investor. Atthe same time, Moody's has rated its proposed new financingtransactions as follows. The rating outlook remains stable.

New ratings assigned:

* B1 for the proposed US $40 million senior secured revolving credit facility, due 2010;

* B1 for the proposed US $87.3 million senior secured term loan, due 2011; and

* Caa1 for the proposed US$128.7 million 11.75% senior fixed rate pay in kind notes, due 2012, by the holding company, Safety Products Holdings, Inc., including the assumption of approximately $103.7 million of existing holdco notes.

Ratings affirmed:

* B1 corporate family rating;

* B2 senior unsecured issuer rating; and

* B3 for the US$152.5 million 9.875% senior subordinated notes, due 2011

The ratings on the company's existing senior secured creditfacility and existing holdco notes will be withdrawn uponcompletion of the acquisition.

Norcross is being acquired by Odyssey Investment Partners for anet price of $472 million, or 7.3 times LTM April 2, 2005 adjustedEBITDA. As part of the transaction, the company is solicitingconsents from its existing senior subordinated note holders aswell as the Holdco note holders to agree to waive their respectivechange of control provision, among other provisions in respect ofthe acquisition, thereby allowing the assumption of the notes bythe new shareholders. Additional funding will come from a new$127 million senior secured credit facility and approximately $110million of equity investment from Odyssey.

The ratings reflect:

* Norcross' leading position in the personal protection equipment market;

* a relatively stable revenue base supported by a diverse customer base and broad product offerings with established brands;

* favorable industry trends and growth dynamics; and

* a track record of solid profit margins and cash flow generation.

On the other hand, the ratings are constrained by:

* its significant debt level and high initial financial leverage;

* acquisitive growth strategy; and

* its private equity ownership which may limit de-leveraging potentials.

The stable rating outlook reflects Moody's expectation ofimproving operating performance at Norcross, offset by potentialacquisition and integration risks as well as potentialshareholder-friendly transactions.

Factors that could cause Moody's to consider a negative ratingaction include large-sized acquisitions that increase debtleverage and alter the company's business and risk profile.Factors that could cause Moody's to consider a positive ratingaction include substantially reduced debt leverage supported by amore conservative long-term financial policy.

Norcross Safety Products is one of the world's largestmanufacturers of personal protection equipment for the generalindustrial, fire service and utility/high voltage markets. Forthe LTM March 2005 period, the company generated roughly:

* 70.2% of its revenues ($317.1 million) from the general industrial markets (respiratory, footwear, gloves, etc.);

The company holds a strong position in a number of niche marketsin which it competes. It also enjoys a reputation for producingquality and highly engineered products and has built a relativelyloyal customer base, particularly in the fire service and utilitymarkets.

Profit margins vary in the different end-markets. The company'sEBITDA margin is about 12.8% in the more fragmented andcompetitive general industrial market, whereas EBITDA margins areas high as 19.4% in the fire service market and 26% in the utilitymarket due to the more highly-engineered nature of the productsand stronger barriers to entry.

Given that the use of personal protection equipment is needed andoften mandated by government regulations in dangerous workenvironment, demand is relatively stable, especially in the fireservice and utility markets. Increased demands for workerprotection by workers compensation insurers and increasingspending on preparedness against future terrorist attacks andcatastrophic events are also driving demand for personalprotection equipment.

The gradual reduction in north American manufacturing workforce isan on-going concern, but this appears to be more than offset bythe growth in the overall PPE market and increasing productpenetration. Both the PPE market size and Norcross' revenueincreased through the most recent manufacturing recession -- atestimony to the diversity of the customer base and the revenuestability of the business.

Moody's notes, however, that since 1995 when the private equityarms of John Hancock and CIBC, together with the management,acquired a controlling interest in the company's predecessor,Norcross has grown rapidly mainly through acquisitions, increasingits annual revenues of approximately $35 million in 1995 totoday's $452 million.

Given that the personal protection market is highly fragmented,Moody's expects Norcross to continue its acquisitive growthstrategy. The company's private equity ownership also makes itprone to use debt capital to finance future acquisitions. Moody'stherefore expects its debt leverage to be maintained at arelatively high level in order to maximize returns to equitysponsors.

The company's capex requirement is low, at $8-9 million a year, or2% of sales. This has contributed to the company's relativelygood track record of free cash flow generation. Moody's estimatesfree cash flow (cash from operations minus capex) in the firstcouple of years to be roughly 8-9% of total debt outstanding.Short-term liquidity, to be provided by an undrawn $40 millionrevolver, is expected to be adequate over the next twelve months.

The B1 rating on the $127.3 million senior secured credit facilityreflects its senior secured status in the debt structure but weakasset coverage. The facility will be secured by a first prioritylien on the capital stock as well as all assets of Norcross andsubsidiaries, and will be guaranteed by all material domesticsubsidiaries and its parent, Safety Products Holdings, Inc.

The Caa1 rating on the $128.7 million senior pay in kind notesissued by the HoldCo reflects their unsecured nature, structuraland effective subordination to senior debt, including those atNorcross. The HoldCo notes are un-guaranteed and will PIK at11.75% payable semi-annually for the first five years. However,the company has the option to make the interest payment in cash orin kind although its current intention is to pay in kind.

Norcross Safety Products L.L.C., headquartered in Oak Brook,Illinois, is a leading manufacturer of personal protectionequipment.

The downgrade of Northwest's Corporate Family and Senior Unsecuredratings reflects the company's continuing operating losses andnegative cash flow. Higher than expected fuel costs accompaniedby limited progress in achieving needed labor cost reductions hasleft the company with an uncompetitive cost structure and willpreclude any near term improvement in the company's operatingperformance.

Additionally, Northwest has significantly underfunded definedbenefit pension plans and faces large required contributions forthe remainder of 2005 and in 2006. The company supports proposedpension reform that would provide legislative relief to extend theperiod of time to fund its pension plans from the current 3 to 5year period of time to 25 years. In Moody's view, shouldNorthwest fail to achieve the labor concessions it seeks as wellas pension contribution relief, the company could need toreorganize its obligations through bankruptcy proceedings.

The ratings take into account:

* the company's current liquidity;

* its ongoing efforts to negotiate cost reductions with its unions; and

* its obligations related to its underfunded pension plans.

While Northwest maintains a strong route system including itsdomestic hubs in Minneapolis and Detroit, a significant Asiannetwork supported by fifth freedom flying rights out of TokyoNarita, and an important alliance with KLM, the company'soperating cost structure and upcoming cash calls for pensionfunding and debt maturities remain significant credit challenges.

Northwest's cost structure is among the highest in the U.S.airline industry, and renders the company unable to effectivelycompete with the growing cadre of low cost carriers in themarketplace.

Northwest, like other major airlines, has sought concessions fromits labor unions to reduce its operating costs, but to date onlylimited progress has been achieved. Moreover, the company'scontinuing high labor costs have been exacerbated by persistenthigh fuel costs, resulting in continued cash operating losses forthe company. The company's cash operating losses are a particularconcern in relation to its ability to sustain an adequateliquidity profile because of ongoing cash needs for pensionfunding, business reinvestment and upcoming debt maturities.

Northwest's balance sheet liquidity currently remains sound today;Moody's estimates unrestricted cash will be approximately $2.0billion at the end of the second quarter. However, in the absenceof changes in Northwest's cost structure and the airline pricingenvironment, liquidity is likely to erode over the next severalquarters due to ongoing cash operating losses, pensioncontribution requirements and large debt maturities during 2006.

The downgrade of the company's Speculative Grade Liquidity Ratingto SGL-3 from SGL-2 reflects continued negative cash flow and theoutlook for erosion of balance sheet liquidity, which was theprimary driver of the former SGL-2 rating. Additionally, the SGL-3 rating reflects the limited access to external financial marketsand the limited amount of unencumbered assets. Debt maturitiesfor the remainder of 2005 are approximately $280 million butincrease in 2006 to approximately $830 million.

In addition, pension contributions for the remainder of 2005 willbe approximately $244 million, and Moody's estimates that 2006contribution requirements will be substantial.

In late 2004, the company restructured and extended its fullydrawn $975 million bank line of credit that was due to mature inOctober 2005. The original facility consisted of a $575 millionTerm Loan A that matures in November 2009, and a $400 million TermLoan B that matures in November 2010. The Term Loan A amortizesover five years through 2009, with the first amortized payment of$148 million due in November 2005.

In April 2005, the company successfully refinanced this firstpayment and created a new Term Loan C for $148 million payable insix years. Moody's assigned a B3 rating to the new Term Loan C,the same ratings Term Loans A and B currently have as a result ofthe rating downgrade.

In addition, as part of this renegotiation, Northwest alsoobtained an amendment that waived the fixed charges coveragecovenant from June 30, 2005 to June 30, 2006 due to the higherthan expected fuel charges and labor costs which might have causednon-compliance with the covenant. The bank facility is guaranteedby Northwest Airlines Corporation and collateralized NorthwestAirlines, Inc.'s Pacific division route rights and slots and byaircraft.

Selected EETC ratings were adjusted downward. The rating actionswere the result of a combination of the change in the underlyingratings of Northwest and increased loan to value stress due toMoody's view of current market values of certain aircraft types inthe collateral pool.

Northwest's ratings are supported by its near term liquidityprofile, but could be subject to further downgrade if theliquidity position further erodes. Moreover, inability tomeaningfully improve its cost structure through labor negotiationsand other actions, restore profitable operations, and achievesufficient cash flow generation to address upcoming pension anddebt maturities without reducing available liquidity could alsoadversely affect the rating. Any potential for rating upgradewould require sustained profitable operations and free cash flowgeneration sufficient to address upcoming cash calls, as well as areduction of indebtedness.

Ratings affected include:

Northwest Airlines Corporation --

* Corporate Family (previously called Senior Implied) rating: to Caa1 from B2

* LT Issuer rating: to Ca from Caa2

* Speculative Grade Liquidity Rating: to SGL-3 from SGL-2

* Guaranteed Convertible Notes to Caa3 from Caa1.

Northwest Airlines, Inc. --

* Senior Unsecured debt: to Caa3 from Caa1

* Senior Unsecured and Subordinated debt to be issued under the multiple seniority shelf: to (P)Caa3 from (P)Caa1 and to (P) C from (P)Caa3

The Stonebridge entities are private equity investment firms whichpurchased the Debtors in 2000. The 20 individuals participated inthe management of the Debtors' business operations prior to thebankruptcy filing.

Having reviewed the Debtors' financial documents, the Trusteewants to know whether:

-- the Debtors were insolvent in the fourth quarter of 2002, and

-- the continued operations of the Debtors' businesses until the bankruptcy filing plunged the Debtors deeper into insolvency.

The Trustee wants to determine whether the Stonebridge boardmembers knew or should have known about the Debtors' insolventcondition and ignored financial data showing significant losses tothe estates.

The Trustee contends that if the Debtors' assets were sold beforethe fourth quarter of 2002, the estates' creditors would haveobtained a higher recovery on account of their claims.

Headquartered in Springfield, Ohio, O-Cedar Holdings, Inc.,through its debtor-affiliate, manufactures brooms, mops, and scrubbrushes for household and industrial use. The Company filed forchapter 11 protection on August 25, 2003 (Bankr. Del. Case No. 03-12667). John Henry Knight, Esq., at Richards, Layton & Finger,P.A., and Adam C. Harris, Esq., at O'Melveny & Myers LLP representthe Debtors in their restructuring efforts. When the Companyfiled for protection from its creditors, it listed over $50million in both assets and debts. On May 26, 2004, the cases wereconverted to chapter 7 and Jeoffrey L. Burtch was appointedtrustee.

OWENS CORNING: Asks Court to Okay Technical Changes to DIP Order----------------------------------------------------------------On October 28, 2004, the U.S. Bankruptcy Court for the District ofDelaware approved an extension of Owens Corning and its debtor-affiliates' postpetition credit agreement with Bank of America,N.A. and certain other lenders for an additional two years. TheCourt also authorized the Debtors to amend their postpetitionfinancing to terminate the Commitments of the Existing Lendersother than BofA and add new Lenders, pursuant to the SecondAmendment to Postpetition Credit Agreement. The Second Amendmentspecifically expanded the spectrum of available providers fromwhom the Debtors could obtain "Bank Products" -- credit cards,automatic clearing house transactions, cash management, hedgeagreements and the like -- from just BofA to any Lender, includingBofA, and any Lender's affiliates.

J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington,Delaware, relates that the Agent and the Lenders have requested atechnical amendment to the definition of "Obligations" toreconcile two potential discrepancies between the Second AmendedDIP Order and the Amended Credit Agreement. The Agent and theLenders have raised concern that the definition of "Obligations"in the Second Amended DIP Order:

-- does not expressly include liabilities of the Debtors under the Amended Credit Agreement to the Lenders' affiliates, as opposed to the Agent and the Lenders. The Agent and the Lenders noted that the Amended Credit Agreement permits the Debtors to incur liabilities to the Lenders' affiliates through the use of the affiliates' Bank Products. To resolve any uncertainty as to this issue, the Agent and the Lenders have asked the Debtors to obtain clarification from the Court that the term "Obligations," as defined in the Second Amended DIP Order, may include liabilities of the Debtors to the Lenders' affiliates; and

-- fails to expressly reference "Bank Products," which are included within the definition of "Obligations" in the Amended Credit Agreement. The Amended Credit Agreement defines "Obligations" to "include[], without limitation, . . . all debts, liabilities and obligations now or hereafter arising from or in connection with Bank Products." Accordingly, the Agent and the Lenders have asked the Debtors to obtain clarification that "Bank Products" -- which are a key benefit to the Debtors under the Credit Agreement -- are included within the definition of "Obligations" in the Second Amended DIP Order.

The Debtors discussed the issue with the Agent and the Lendersand agreed that the Second Amended DIP Order should be modifiedto provide that all loans made under the Credit Agreement andinterest thereon, together with all reimbursement and otherobligations in respect of letters of credit issued under theCredit Agreement, and all fees, costs, expenses, indebtedness,obligations and liabilities of the Debtors to the Agent, theLenders and any affiliate of any Lender under or in respect ofthe Loan Documents, any Bank Product or the DIP Order, including,without limitation, "Obligations" as defined in the CreditAgreement, are referred to as the "Obligations".

The Debtors ask the Court to approve the modified definition of"Obligations" in the Second Amended DIP Order.

Moody's said that this rating action follows the June 6, 2005announcement by Washington Mutual, Inc. that it had entered into adefinitive agreement to acquire Providian Financial Corporation.On the same day, Moody's affirmed the ratings and stable outlookof Washington Mutual, Inc. (Senior Debt at A3) and its thriftsubsidiaries (Deposits at A2).

The rating agency also put the ratings of Providian National Bank(Deposits at Ba2, Issuer Strength at Ba3, and Bank FinancialStrength at D) under review for possible upgrade. The ratings ofProvidian (Senior Debt at B2) were placed under review in January,and remain under review for upgrade.

Moody's review of Providian's receivables-backed securities willfocus primarily on the financial strength of the seller/serviceras well as the integration of Providian's credit card businesswith Washington Mutual's mortgage-based business model.

Upon acquisition, it is expected that Providian National Bank willmerge with one of Washington Mutual's thrift subsidiaries,Washington Mutual Bank, FSA. Washington Mutual Bank will be thesurviving entity and assume the role of seller/servicer for therelated asset-backed programs.

The current rating of Washington Mutual Bank is considerablystronger than that of Providian National Bank. The creditstrength of the seller/servicer is an important consideration inMoody's credit opinion of the related asset-backed securities dueto the correlation between the viability of the revolvingsecuritization program and that of the related seller/servicer.It is Moody's opinion that higher-rated seller/servicers are morelikely to maintain the ongoing servicing and originationrequirements of such a program.

Furthermore, the relatively strong credit profile of WashingtonMutual Bank will provide the credit card business with access tobroader and cheaper sources of financing, which may allowProvidian to compete more effectively in the middle and primesegments of the credit card market.

Over the past three years, current Providian management havesuccessfully grown the middle-market segment of their business andmay benefit further from cross-sale opportunities with WashingtonMutual's customer base. However, Providian has had moredifficulty in expanding the much more price-sensitive primesegment of their card business.

Competition in the prime segment of the market is formidable andincludes issuers with much greater scale and/or financialresources than the pro forma combined Providian and WashingtonMutual entity; therefore, Moody's believes the company's forays into the prime card market will continue to be a challenge.

The ratings review will conclude after all the necessary approvalsfor the acquisition have been received, at which point Moody'sexpects Providian's ratings will be raised to the level ofWashington Mutual's for similar instruments.

The performance of the securitized Providian credit card portfolioremains within the bounds of Moody's expectations and is not aprincipal factor in the ratings review. The long-term averageyield, charge-off rate and payment rate have remained above theindustry average as measured by Moody's Credit Card Index.

Background

Providian Financial Corporation, headquartered in San Francisco,California, is the ninth largest credit card issuer in the U.S.with managed credit card receivables of $18.4 billion at May 31,2005. Providian National Bank, the originator and servicer of theProvidian credit card receivables, is a San Francisco based, FDIC-insured bank and a direct subsidiary of Providian Financial Corp.Providian National Bank has a long-term deposit rating of Ba2, anda bank financial strength rating of C, all of which are underreview for possible upgrade.

Washington Mutual, Inc., headquartered in Seattle, Washington, isthe largest thrift holding company in the U.S. and sixth largestamong U.S. bank and thrift companies, with assets of $320 billionat September.

a) provide legal advice with respect to its powers and duties as debtors-in-possession in the continued operation of their businesses and management of their properties, including the contemplated sale of the Debtors' assets and proposed DIP financing;

To the best of the Debtors' knowledge, Pachulski Stang is a"disinterested person" as that term is defined in Section 101(14)of the Bankruptcy Code.

Headquartered in San Jose, California, Proxim Corporation -- http://www.proxim.com/-- designs and sells wireless networking equipment for Wi-Fi and broadband wireless networks. The Debtorsprovide wireless solutions for the mobile enterprise, securityand surveillance, last mile access, voice and data backhaul,public hot spots, and metropolitan area networks. The Debtoralong with its affiliates filed for chapter 11 protection on June11, 2005 (Bankr. D. Del. Case No. 05-11639). When the Debtorfiled for protection from its creditors, it listed $55,361,000 inassets and $101,807,000 in debts.

QUEENSWAY FIN'L: Creditors Must File Proofs of Claim by Aug. 12--------------------------------------------------------------- The Superior Court of Justice of Toronto, pursuant to its ClaimsProcedure order dated May 27, 2005, set Aug. 12, 2005, as thedeadline for all creditors owed money by Queensway FinancialHoldings Limited and its affiliate, Queensway Holdings, Inc., onaccount of claims existing at the present or commenced in thefuture.

Creditors must file their written proofs of claim on or before theAug. 12 Bar Date, and those forms must be delivered only to Ernst& Young Inc. in its capacity as Court-Appointed Interim Receiverof Queensway Financial Holdings Limited and Queensway Holdings,Inc.

Queensway Financial Holdings Limited is a specialty insurancegroup that provides a range of individual and commercial insurancecoverages. The Company is also a property and casualty insuranceholding company and attains its objective through the selectiveacquisition and development of niche property and casualtyinsurance Companies in Canada and the United States

On that premise, the debt at Rainbow would be supported byattractive assets, primarily the national cable networks, AMC, IFCand WE with good cash flow generation; it will also no longer beas burdened by the cash demands at VOOM, a sister subsidiary nowin the process of shutting down.

As noted when Moody's originally put Rainbow on review, Moody'sviews Rainbow Media's strategy to exit the satellite business as acredit positive, since Rainbow Media planned to fund the DBSsegment's development with Rainbow National's cash flow.

The review will focus on Moody's assessment of the improvement tocredit metrics as Rainbow National will no longer be funding thelarge capital expenditures necessary to develop the DBS segmentand the potential for somewhat lower event risk following thespin-off from Cablevision Systems Corporation. In addition, thereview will include an analysis of:

* the financial position post spin, in part to assess the remaining cash, which historically has been quite high;

* the ultimate cost associated with closing down the operations of VOOM and the likelihood that VOOM will remain a cash drain to Rainbow Media over the near term as the company services its existing customers; and

* the potential for the parent company to continue to utilize Rainbow National as a funding vehicle for speculative investments, including VOOM21.

(4) Caa1 rating on the $500 million of senior subordinated notes due 2014;

(5) B2 corporate rating; and

(6) B3 senior unsecured issuer rating.

In a separate press release, Moody's placed under review forpossible downgrade the ratings on the debt of Cablevision SystemsCorporation and CSC Holdings following the announcement that theDolan family would take the cable assets private via debtfinancing .

Rainbow National Services LLC, headquartered in Jericho, New York,supplies television programming to cable television and directbroadcast service providers throughout the United States. Thecompany operates three entertainment programming networks:

REGIONAL DIAGNOSTICS: Committee Taps Capstone as Financial Advisor------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Ohio gavethe Official Committee of Unsecured Creditors of RegionalDiagnostics, L.L.C., and its debtor-affiliates permission toemploy Capstone Advisory Group, LLC as its financial advisors.

Capstone Advisory will:

a) advise and assist the Committee in its analysis of historical performance identifying issues impacting earnings deterioration, evaluate near and long-term business prospect under various restructuring or sale options and evaluate near and long-term cash forecasts and adequacy of capital;

b) evaluate the adequacy of the Debtors' and their advisors marketing efforts in identifying the appropriate slate of potential acquirers and provide the Committee with analysis and advice on the adequacy of possible bids from those acquirers;

c) assist and advise the Committee in the analysis of the terms and conditions of any DIP financing arrangements and in evaluating the retention arrangements for advisors to be retained be the Debtors;

d) assist and advise the Committee and its counsel in identifying and reviewing preference payments, fraudulent conveyances and other causes of action;

e) analyze the Debtors' assets and unsecured creditors recovery under various recovery scenarios and analyze alternative reorganization scenarios in order to maximize the recovery to general unsecured creditors;

f) develop a monitoring process that will enable the Committee to effectively evaluate the Debtors' performance on an ongoing basis; and

g) perform other financial advisory services to the Committee that are consistent with its roles and duties in the Debtors' chapter 11 cases.

Capstone Advisory assures the Court that it does not represent anyinterest materially adverse to the Committee, the Debtors or theirestates.

Headquartered in Warrensville Heights, Ohio, Regional Diagnostics,L.L.C. -- http://www.regionaldiagnostic.com/-- owns and operates 27 medical clinics located in Florida, Illinois, Indiana, Ohio andPennsylvania. The Company and its debtor-affiliates filed forchapter 11 protection on April 20, 2005 (Bankr. N.D. Ohio Case No.05-15262). Jeffrey Baddeley, Esq., at Baker & Hostetler LLPrepresents the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they estimatedassets of $10 million to $50 million and debts of $50 million to$100 million.

REGIONAL DIAGNOSTICS: Panel Hires Traub Bonacquist as Co-Counsel----------------------------------------------------------------The Official Committee of Unsecured Creditors of RegionalDiagnostics, LLC, and its debtor-affiliates, sought and obtainedpermission from the U.S. Bankruptcy Court for the NorthernDistrict of Ohio, Eastern Division, to employ Traub, Bonacquist &Fox LLP as its local bankruptcy counsel, nunc pro tunc toMay 10, 2005.

Traub Bonacquist will:

a) provide legal advice to the Committee with respect to its duties and power in the Debtors' cases;

b) assist the Committee in its investigation of the acts, conducts, assets, liabilities, and financial condition of the Debtors, the disposition of the Debtors' assets, and other significant pre-petition transactions.

c) participate in the formulation of a plan of reorganization;

d) assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs and causes of their insolvency; and

e) perform such other legal services as may be required and in the interest of the creditors, including, but not limited to, the commencement and pursuit of such adversary proceedings as may be authorized.

Michael S. Fox, Esq., a partner at Traub Bonacquist, discloses therates of the professionals at his Firm:

Mr. Fox assures the Court that his firm is a "disinterestedperson" as that term is defined in Section 101(14) of theBankruptcy Code.

Headquartered in Warrensville Heights, Ohio, Regional Diagnostics,L.L.C. -- http://www.regionaldiagnostic.com/-- owns and operates 27 medical clinics located in Florida, Illinois, Indiana, Ohio andPennsylvania. The Company and its debtor-affiliates filed forchapter 11 protection on April 20, 2005 (Bankr. N.D. Ohio Case No.05-15262). Jeffrey Baddeley, Esq., at Baker & Hostetler LLPrepresents the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they estimatedassets of $10 million to $50 million and debts of $50 million to$100 million.

RHODES INC: Files Joint Plan of Reorganization in N.D. Georgia--------------------------------------------------------------Rhodes, Inc., Rhodes Holdings and Rhodes Holdings II filed a jointchapter 11 plan of reorganization and its accompanying disclosurestatement explaining the Plan with the United States BankruptcyCourt for the Northern District of Georgia on June 20, 2005.Rhodes expects to emerge from bankruptcy by early fall.

"We appreciate very much all the support from our vendors and thehard work by our employees," Rhodes' current CEO, Steven S.Fishman, commented. "This major development would not have beenpossible without them."

Terms of the Plan

Under the Plan, general unsecured creditors owed $59.5 millionwill receive pro rata shares of 30,000,000 New Common Stock.Unsecured claims less than $2,500 will be paid in cash.

Headquartered in Atlanta, Georgia, Rhodes, Inc., will continue tooffer brand-name residential furniture to middle- and upper-middle-income customers through 63 stores located in 11 southernand midwestern states (after disposing of the locations listedabove). The Company and two of its debtor-affiliates filed forchapter 11 protection on Nov. 4, 2004 (Bankr. N.D. Ga. Case No.04-78434). Paul K. Ferdinands, Esq., and Sarah Robinson Borders,Esq., at King & Spalding represent the Debtors in theirrestructuring efforts. When the Debtors filed for protection fromtheir creditors, they estimated less than $50,000 in assets andmore than $10 million in total debts.

ROYSTER-CLARK: Moody's Junks $200 Million First Mortgage Notes--------------------------------------------------------------Moody's Investors Service changed Royster-Clark, Inc.'s ("RCT" -- B3 Long-term Corporate Family Rating) outlook to developing. Theoutlook revision follows the company's announcement that it hasproposed an initial public offering of Income Deposit Securities.

RCT together with its parent Royster-Clark Group, Inc. on June16th, 2005 announced the proposed initial public offering, inCanada, of IDSs to be issued by RCI's affiliates Royster-ClarkLtd., a newly formed Ontario company, and Royster-Clark ULC, anewly formed Nova Scotia unlimited liability corporation.

The Company will hold all of the Class A Common Shares of RCGwhich will represent a controlling interest in RCG. Proceeds fromthe IDS issuance will be used to redeem all first mortgage notesdue 2009. RCT announced, (on June 16th, 2005), that it iscommencing a cash tender offer for any and all of its 10 1/4 %First Mortgage Notes due 2009.

Moody's believes that RCT will not seek a rating for the IDSs.Therefore, Moody's will withdraw all ratings upon completion ofthe first mortgage notes redemption.

Royster-Clark, Inc., headquartered in New York, New York, is aprivately owned supplier and distributor of:

* Fertilizers' * crop protection products' * seed, and * services to farmers in the South, Midwest and East regions of the United States.

The company reported revenues of $1.1 billion for the LTM endedMarch 31, 2005.

SAINTS MEMORIAL: Moody's Upgrades Long-Term Rating to Ba1 from Ba2------------------------------------------------------------------Moody's Investors Service upgraded Saints Memorial MedicalCenter's long-term rating to Ba1 from Ba2. The outlook for therating is stable. The rating applies to $62.7 million of Series1993A bonds issued through the Massachusetts Health & EducationalFacilities Authority.

Debt-Related Derivative Instruments: None.

Strengths:

* Healthy and improving operating performance (2.3% operating margin in FY2004) sustained through first 7 months of FY2005, driven by volume growth especially in higher acuity services (inpatient admissions up 6.8%, outpatient surgeries up 6.7% in FY2004) and growing active medical staff including several cardiologists and neurologists expected to be added this year.

* Stable liquidity levels ($38.4 million in 2004) held by both the Medical Center and affiliated Foundation (Foundation is not part of the obligated group) provide solid cushion to annual operations (129 days cash on hand).

Challenges:

* Debt levels remain very high relative to size of operations (debt to cash flow of 7.3x in 2004) and balance sheet liquidity (cash to debt 56%), although debt service is primarily fixed rate and additional borrowing and capital plans remain limited.

* Competitive market position in Lowell, Massachusetts with primary competition coming from Lowell General Hospital (rated Baa1, 10,819 admissions in 2004) located just a few miles away; significant migration to the academic medical centers of Boston for highest acuity services remains a challenge.

Recent Developments/Results

Saints Memorial, despite operating in a competitive market inLowell, Massachusetts, has maintained growth in inpatientadmissions and surgeries performed over the last two years, atrend continuing through seven months of FY2005. Growth has beenexperienced across service lines, although newborn admissions havedeclined modestly.

Saints has generated growth through active recruitment ofphysicians including specialists in surgery, endoscopy,cardiology, and neurology. Most of the active specialists referboth to Saints and nearby Lowell General. Saints maintains alarge outpatient service array, with more than 60% of revenuesgenerated by outpatient activities.

Volume growth, along with well managed expenses, has led toimproved operating performance and cash flow available for debtservice. Saints' operating margin improved from 0.7% in 2002 to2.3% in 2004, a level of profitability exceeded in the first sevenmonths of FY2005. Operating cash flow and investment returns havealso boosted liquidity with unrestricted cash growing from $30.9million in 2002 to $38.4 million in 2004, a 24% rise.

Days cash on hand stood at 129 days at the end of FY2004. Aportion of Saints cash ($12.8 million) is held at the relatedfoundation (Saints Memorial Health System) not included in theobligated group. However, the funds are unrestricted and could beused to pay debt service or other expenses at the Board'sdiscretion and Moody's has included these funds in our ratiocalculations. The Board of the foundation and the Medical Centerare identical.

Saints does remain highly leveraged as demonstrated by a very highdebt to cash-flow ratio of 7.3 times despite operatingimprovements and precludes a higher rating at this time. Totaldebt remains at over $68 million, including small financings forequipment through capital leases. Cash to debt was adequate at 56percent.

Saints does not have any near-term significant capital plans, butmay consider additional small financings including potentiallyborrowing $3 to $5 million within the next year. Saints' maximumannual debt service of $7.5 million in 2006 declines to $6.3million in 2008 reflecting a decline in debt service on the Series1993 bonds and the short-term nature of capital leases.

* $160.700 million Class A-1 Notes Scheduled Maturity January 2007, rating lowered to Caa1, from a rating of Ba3;

* $243.200 million Class A-2 Notes, Scheduled Maturity January 2014, rating lowered to Caa1, from a rating of B1; and

* $463.348 million Class A3 Notes, Scheduled Maturity January 2014, rating lowered to Caa1, from a rating of B1.

If there is insufficient cash to make full payment of interest onthe July payment date and an event of default is declared,repayment will be made on a pari passu, pro rata basis to allinvestors based on their principal amount outstanding. Currentlyrepayment is on a sequential basis, with Class A-1 principalrepaid before Class A-2 principal, and Class A-2 principal repaidprior to Class A-3 principal.

The proximate cause of the cash flow problems is low harvestvolume recently aggravated by poor weather conditions. However,the Company's flexibility is limited due to the inability toharvest in areas already approved by regulatory bodies other thanthe State Water Resources Control Board. On June 17 the StateBoard ruled that the North Coast Regional Water Quality ControlBoard had approved the Company's harvesting plans withoutsufficient environmental review. This places the disputed plansinto a further process of review and appeal of indeterminateduration.

Moody's rating, while primarily addressing the expected losseposed to investors, also reflects the likelihood of default onJuly 20, as well as the possibility of continued timber harvestsand revenue generation after default. The primary assetunderlying the transaction, over 200,000 acres of timber propertyin northern California, is unique and provides investors withconsiderable protection.

Unlike other structured finance assets, timber that is notharvested today remains available to be harvested and provide cashflow at a later time. In addition, Scotia Pacific and its parent,The Pacific Lumber Company, are required to manage the property ona sustained yield basis. This means that if harvesting occurs atmaximum permitted levels, on average, timber growth tends toreplace the harvested amount at a rate that permits harvest levelsto be maintained.

Scotia Pacific Company LLC is a wholly owned subsidiary of ThePacific Lumber Company. It is structured to be a bankruptcy-remote entity and its assets are segregated from those of PALCOand PALCO's parent corporations. Scotia Pacific's principal assetconsists of timber property and an associated database integral tomanaging the property.

PALCO is a 140-year old lumber and timber products company locatedin Scotia, CA. In addition to owning Scotia Pacific, PALCO is theprimary purchaser of the timber harvested by Scotia Pacific.PALCO is a wholly owned subsidiary of Houston-based Maxxam Inc.Neither PALCO nor Maxxam are currently rated by Moody's.

Pursuant to a previously filed request, the Debtors sought toestimate the Steele Claim and the Cannataro Claim for purposes offunding the Disputed Claims Reserve to be maintained andadministered by the Creditor Trust pursuant to the Debtors' FirstAmended Plan.

In April 2005, Mr. Steele and Mr. Cannataro informed the Debtorsand the Official Committee of Unsecured Creditors of potentialobjections they had regarding the Plan, including objections tothe third party releases. Mr. Steele and Mr. Cannataro assertedthat the Plan could not be confirmed over their objections.

Moreover, in May 2005, Mr. Steele and Mr. Cannataro disclosed tothe Debtors and the Creditors Committee further potentialobjections related to the Debtors' Estimation Motion. Both Mr.Steele and Mr. Cannataro assert that they are entitled toindemnification and advancement by the Debtors pursuant toDelaware law and the Debtors' by-laws. Mr. Steele and Mr.Cannataro said that they intend to object to the Plan and to theEstimation Motion to the extent those limit their indemnificationrights.

The parties engaged in arm's-length negotiations to resolveMr. Steele's and Mr. Cannataro's objections. In a Court-approvedstipulation, the parties agree that:

(a) On the Effective Date of the Confirmed Plan of Reorganization, the Debtors will transfer to the Creditor Trust $1.365 million each for the Steele Reserve and the Cannataro Reserve.

(b) The Reserve Amounts will be separately advanced to Mr. Steele and Mr. Cannataro for post-Effective Date attorneys' fees and expenses actually and reasonably incurred by the claimants in connection with:

-- any action in which Mr. Steele and Mr. Cannataro were parties because of their employment with any of the Debtors, and given that Mr. Steele and Mr. Cannataro acted in good faith; and

-- the defense or settlement of any action by or in the right of any of the Debtors to procure a judgment in its favor, provided that the Debtors and the Creditor Trust will have no obligation to advance any sums to Mr. Steele and Mr. Cannataro.

(c) Mr. Steele and Mr. Cannataro may seek advancement on a monthly basis, beginning no earlier than the end of the month that follows the Effective Date. Prior to the payment of any sums to Mr. Steele and Mr. Cannataro from the Steele and Cannataro Reserves, Mr. Steele and Mr. Cannataro will submit to the Creditor Trust:

-- any information required by the Creditor Trust demonstrating that the Claimant has taken all reasonable actions to obtain payment under applicable insurance policies, and that all insurers have denied or disclaimed coverage or have informed the Claimant that any available proceeds up to applicable limits of liability have been exhausted; and

-- an undertaking by the Claimant to promptly repay the Creditor Trust all amounts paid to him in the event that it is determined that he is not entitled to advancement.

(d) To receive advancement, Mr. Steele and Mr. Cannataro will submit to the Creditor Trust a statement of legal fees and expenses reasonably procured during each applicable monthly period, containing a detailed breakdown of legal fees and expenses, together with copies of relevant invoices and backup.

(e) Mr. Steele's and Mr. Cannataro's rights to advancement will terminate on the first to occur of:

-- payment of the Claimant's final request for advancement following conclusion of the last of any action or proceeding described;

-- disbursement of the full amount of the Steele and Cannataro Reserves; or

-- five years from May 2005,

provided, however, that if the Claimant's rights to advancement would otherwise terminate after five years, and if warranted by the facts and circumstances, the Claimant's rights to advancement under the Stipulation may be extended for a finite term based on the particular facts and circumstances.

Upon termination of the Claimant's rights to advancement, any amounts remaining in the Reserve will vest immediately with the Creditor Trust for the benefit of all beneficiaries in accordance with the Plan, and the Debtors and the Creditor Trust will have no further obligations to Mr. Steele or Mr. Cannataro.

(f) On the Effective Date, Mr. Steele and Mr. Cannataro unconditionally release the Debtors and the Creditor Trust from all claims that arose before the Effective Date.

(g) Mr. Steele's and Mr. Cannataro's rights under any insurance policy to indemnification or reimbursement from the insurance proceeds will not be altered or waived by reason of the Stipulation.

Headquartered in Downers Grove, Illinois, Spiegel, Inc. --http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, homefurnishings and other merchandise through catalogs, e-commercesites and approximately 560 retail stores. The Company filed forChapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,at Shearman & Sterling, represent the Debtors in theirrestructuring efforts. When the Company filed for protection fromits creditors, it listed $1,737,474,862 in assets and$1,706,761,176 in debts. The Court confirmed the Debtors'Modified First Amended Joint Plan of Reorganization on May 23,2005. Impaired creditors overwhelmingly voted to accept the Plan.Spiegel emerged from bankruptcy as Eddie Bauer HoldingsInc.

STELCO INC: Will Seek Extension of Stay Period to Sept. 23----------------------------------------------------------Stelco Inc. (TSX:STE) reported that the Monitor's Thirty-SecondReport in the matter of the Company's Court-supervisedrestructuring was filed on June 21, 2005.

The Report provides an update on a number of matters. Theseinclude an update on the issuance of Stelco's guidance update onJune 1, 2005; cash flow results for the entities that filed underCCAA, including variances from the forecast included in theMonitor's 26th Report; and the mediation process.

Production and Shipping

The Report noted that production of semi-finished steel hasdecreased during 2005 in response to a softening in steel marketdemand and operational issues at the Hamilton facility. Totalconsolidated semi-finished production for the year-to-date endedMay 31, 2005, was 2,166,000 net tons, compared to 2,292,000 nettons during the same period in 2004.

The Monitor noted that product shipment volumes have declinedduring 2005 in response to a softening of steel markets. On aconsolidated basis, total shipments for the year-to-date ended May31, 2005 were 1,967,000 net tons, compared to 2,065,000 net tonsduring the same period in 2004.

Market Conditions

The Monitor noted Stelco's indication that the softening in steelmarket demand and pricing has continued through 2005, especiallyin the construction sector and, to a lesser extent, the automotivesector. The Report also noted the volatility of raw material andenergy input costs such as scrap, coke, coal, iron ore,electricity and natural gas. The Monitor added that Stelco'sfuture financial results will be highly dependent on the directionof those input costs and the strength of North American steelmarkets.

Cash Flow Forecasts

The Monitor noted that Appendix F to the Report contains cash flowforecasts for the applicants that filed under CCAA for the periodended June 11, 2005 through to September 23, 2005. The Reportnoted that Stelco is forecasting that the total facilityutilization of the Existing Stelco Financing Agreement willincrease by $39.8 million during this period to stand at$113 million as at September 23, 2005. This marks a reversal fromprevious months, during which the total facility utilization haddeclined.

This reversal is attributable in large part to a relativereduction in accounts receivable collection caused by forecastlower shipping volumes and reduced spot market selling prices (seemarket conditions above) as well as to continued capitalexpenditure disbursements related to the Phase II upgrade at theLake Erie hot strip mill and two mini-cogeneration projects atLake Erie and Hamilton. The Report noted that Stelco will notneed to draw upon the DIP Facility during the period in question.

The Asset Sale Process

The Report provided an update on various initiatives under theasset sale process. The transactions for the sale of WellandPipe's U&O mill and for the plate mill assets of Plateco haveclosed. Stelpipe, Stelco and Romspen are currently negotiatingthe terms of a definitive agreement concerning the sale of theassets of Stelpipe. The Monitor noted that Stelco currentlyexpects to seek Court approval of that transaction in July 2005.The Report added that Stelco is continuing its review of offers ithas received for other non-core subsidiaries and is currentlypursuing discussions with a number of bidders with respect totheir offers. The Monitor noted that the proceeds from any saleof the non-core subsidiaries will provide Stelco with additionalfunds to assist in the recapitalization of the integrated steelbusiness.

Stay Period Extension

The Report noted that Stelco will seek an extension of the stayperiod, which expires at midnight on July 8, 2005, to Sept. 23,2005. The Monitor added that the extension is necessary forStelco to continue discussions with stakeholders, includingthrough the mediation process, to develop and file a plan ofarrangement or compromise, and to complete the claims procedure.The Monitor stated that such an extension is in the interest ofall stakeholders and recommended that the request be granted.

Stelco, Inc. -- http://www.stelco.ca/-- is a large, diversified steel producer. Stelco is involved in all major segments of thesteel industry through its integrated steel business, mini-mills,and manufactured products businesses.

In early 2004, after a thorough financial and strategic review,Stelco concluded that it faced a serious viability issue. TheCorporation incurred significant operating and cash losses in 2003and believed that it would have exhausted available sources ofliquidity before the end of 2004 if it did not obtain legalprotection and other benefits provided by a Court-supervisedrestructuring process. Accordingly, on Jan. 29, 2004, Stelco Inc.and certain related entities filed for protection under theCompanies' Creditors Arrangement Act.

The credit quality of the mortgage loans underlying thesecuritization is comparable to that of mortgage loans underlyingsub-prime securitizations. However, after the FHA and VAinsurance is applied to the loans, the credit enhancement levelsare comparable to the credit enhancement levels for prime-qualityresidential mortgage loan securitizations. The insurance covers alarge percent of any losses incurred as a result of borrowerdefaults.

The Federal Housing Administration is a federal agency within theDepartment of Housing and Urban Development whose mission is toexpand opportunities for affordable home ownership, rentalhousing, and healthcare facilities. The Department of VeteransAffairs, formerly known as the Veterans Administration, is acabinet-level agency of the federal government. The rating ofthis pool is based on the credit quality of the underlying loansand the insurance provided by FHA and the guarantee provided byVA.

Specifically, approximately 76% of the loans have insuranceprovided by FHA, 18% from the VA, and 6% from the Rural HousingService. The rating is also based on the structural and legalintegrity of the transaction.

STRUCTURED ASSET: Moody's Rates Class B1 Sub. Certs. at Ba1-----------------------------------------------------------Moody's Investors Service assigned an Aaa rating to the seniorcertificates issued by Structured Asset Securities Corporation,Mortgage Pass-Through Certificates, Series 2005-WF2, and ratingsranging from Aa1 to Ba1 to the subordinate certificates in thedeal.

The securitization is backed by Wells Fargo originated adjustable-rate (approximately 83%) and fixed-rate (approximately 17%)subprime mortgage loans acquired by Structured Asset SecuritiesCorporation. The ratings are based primarily on the creditquality of the loans, and on the protection from subordination,mortgage insurance, overcollateralization and excess spread. Thecredit quality of the loan pool is stronger than the average loanpool backing recent subprime securitizations. Moody's expectscollateral loss to range from 3.4% to 3.65%.

TOWER AUTOMOTIVE: Wants to Advance Fees for ERISA Class Actions---------------------------------------------------------------Eleven purported class action lawsuits have been filed againstTower Automotive Inc. and its debtor-affiliates' current andformer officers, directors and employees since the Debtors'bankruptcy filing. The Class Action Lawsuits sought hundreds ofmillions of dollars in potential damages for a variety of allegedviolations of the Securities and Exchange Act of 1934 and theEmployee Retirement Income Security Act.

To prevent the Class Action Plaintiffs from unleashing a flurryof subpoenas, document demands, deposition notices and otherdiscovery devices against the Individual Defendants and otheremployees and personnel essential to stabilizing the Debtors'operations, the Debtors sought to enjoin the continuation of theClass Action Lawsuits.

The Debtors have filed a complaint and request to extend theautomatic stay or, alternatively, for an injunction to enjoin theSecurities Litigation, as well as other actions based onviolations of ERISA.

Federal, however, denied coverage for the ERISA Class Actions.Subsequently, the Debtors filed a complaint against Federalseeking, among other things, declaratory relief to establishFederal's obligations to advance defense costs under FederalPolicy No. 8151-5430. Federal has sought dismissal of the ERISACoverage Litigation.

By this motion, the Debtors ask the U.S. Bankruptcy Court for theSouthern District of New York for authority to honor theirindemnification obligations to the Individual Defendants bypaying their legal fees and expenses incurred in connection withdefending against the ERISA Class Action and any action that mayarise from or is related to the ERISA Class Actions. In thealternative, the Debtors ask the Court to lift the stay to permitthe Individual Defendants to collect on their prepetitionindemnification claims against the Debtors to the extent of theDefense Costs.

Matthew A. Cantor, Esq., at Kirkland & Ellis LLP, in New York,explains that the Debtors are in the critical early stages ofrestructuring their businesses as a prelude to developing a planof reorganization. Thus, the Debtors require the full andundivided attention, effort and energies of the IndividualDefendants to focus on developing and implementing the Debtors'restructuring and preserve, if not enhance, value for allconstituents.

If the Debtors are unable to advance the Defense Costs, theIndividual Defendants, Mr. Cantor asserts, will be forced todefend themselves with their own resources against an avalancheof complex litigation that will consume all of their time andexpend their personal assets, while also facing the risk thatthey will not be reimbursed for legal expenses.

"The distractions of having to defend against the Class ActionLawsuits will be harmful enough since this will diminish theIndividual Defendants' ability to devote all of their energies tothe Debtors' chapter 11 restructuring," Mr. Cantor notes. "Butif the Individual Defendants must also expend their personalresources to defend the ERISA Class Actions (while trying topreserve value for the debtors' constituents, including theplaintiffs), the Debtors undoubtedly would be materially andadversely affected."

The Brand Group Responds

The Brand Group takes no position with respect to the Debtors'request to advance the costs to certain current and formerofficers, directors and employees incurred in connection with thedefense of the ERISA Class Actions.

However, the Brand Group disputes the allegations set forth inthe Debtors' request to the extent they purport to establish orargue in support of the Debtors' request to stay the ClassActions.

The Brand Group maintains that the Debtors have not and cannotestablish a basis for the extraordinary relief requested in theStay Request.

The Brand Group is comprised of Nathan F. Brand, Dorothea C.Brand, Tombstone Limited Partnership, Frederic Mohs and Pamela A.Mohs. The five members lost more than $16 million from thepurchase of the Debtors' Securities.

The Brand Group is the lead plaintiff in the federal securitiesfraud class action entitled "In Re Tower Automotive SecuritiesLitigation," Case No. 1:05-cv-01926-RWS.

* * *

Judge Gropper authorizes the Debtors to advance payment for thereimbursement of certain legal fees, costs and related expensesincurred by certain of the Debtors' current and former officers,directors and employees in connection with the ERISA ClassActions or any action that may arise from, or that are relatedto, the ERISA Class Actions, up to $500,000.

Judge Gropper will consider an increase of the Reimbursement Capat a final hearing to be held at 11:00 a.m. on July 13, 2005.The Final Hearing Date may be extended if the Reimbursement Caphas not been reached.

To the extent that the Debtors pay any Defense Costs, and any ofthe Individual Defendants are subsequently found to have engagedin conduct for which they are not entitled to reimbursement, theDebtors or any successor-in-interest, can, at that time, seekrecovery of any Defense Costs paid on account of the IndividualDefendant.

If the Debtors prevail in the ERISA Coverage Litigation, theDebtors are allowed to seek reimbursement from Federal for anyDefense Costs they advanced to the Individual Defendants.

TOWER AUTOMOTIVE: New Center Wants Stay Lifted To Effect Set-Off----------------------------------------------------------------Prior to the Petition Date, New Center Stamping, Inc., soldcertain component parts to Tower Automotive Inc. and its debtor-affiliates for which it remains unpaid. New Center says theDebtors owe $160,976 for the purchased component parts.

The Debtors also provided component parts to New Center prior tothe Petition Date for which they remain unpaid. New Center saysit owes the Debtors $82,316 for the component parts.

Thomas J. Strobl, Esq., at Strobl Cunningham & Sharp, P.C., inBloomfield Hills, Michigan, contends that New Center has a validright of set-off because each of the parties' Prepetition Debtsare mutual.

However, New Center has not been able to exercise its right ofset-off because of the automatic stay imposed in the Debtors'Chapter 11 cases.

Mr. Strobl asserts that New Center is entitled to exercise itsset-off rights because its interest in the Debtors' PrepetitionDebt is not being adequately protected. "New Center has asecurity interest in the New Center Prepetition Debt to theextent of the amount of the Tower Prepetition Debt and theamounts that New Center owes to the Debtor serve as collateralfor the amounts owing to New Center by the Debtor," according toMr. Strobl.

By this motion, New Center asks the U.S. Bankruptcy Court for theSouthern District of New York to lift the stay to exercise itsset-off right.

UAL CORPORATION: Court Extends Plan Filing Period to Sept. 1------------------------------------------------------------As reported in the Troubled Company Reporter on June 13, 2005, UALCorporation and its debtor-affiliates asked the U.S. BankruptcyCourt for the Northern District of Illinois for another extensionof the exclusive period to file and solicit acceptances for aChapter 11 Plan of Reorganization. The Debtors want theirExclusive Plan Filing Period extended until Sept. 1, 2005, andtheir Exclusive Solicitation Period extended until Nov. 1, 2005.

Objections

(1) HSBC Bank

It is "unfortunate" that the Debtors are seeking anotherextension of the Exclusive Periods, William W. Kannel, Esq., atMintz, Levin, Cohn, Ferris, Glovsky and Popeo, in Boston,Massachusetts, says on behalf of HSBC Bank USA, as IndentureTrustee and Paying Agent. Given the repeated requests forextension, the Debtors are obviously not in a position to suggestthe framework of a Chapter 11 plan. This request is simplyanother precursor for additional requests, "with no end insight," laments Mr. Kannel.

If the Court grants the request, Mr. Kannel says it should beonly for 60 days. The Court should compel the Debtors to file aplan prior to September 1, 2005. Extension of the ExclusivePeriods beyond that point should not be granted.

(2) U.S. Bank and Bank of New York

On behalf of U.S. Bank and the Bank of New York, as IndentureTrustees, Patrick J. McLaughlin, Esq., at Dorsey & Whitney, inMinneapolis, Minnesota, reminds the Court that in the lastrequest for an extension, the Debtors needed time to resolvepension issues, labor issues and exit financing issues. TheDebtors have gone a long way on these fronts, but still have notproduced a Chapter 11 plan. During 30 months of bankruptcy lawprotection, "the Debtors have been unable to provide even a basictimetable for when they will obtain exit financing and be in aposition to propose a Chapter 11 plan," complains Mr. McLaughlin.

The Debtors provide assurances that a plan is forthcoming, butbased on history and recent experience, there is much reason fordoubt. At the rate these proceedings are going, the Debtors willnot proffer a plan until 2006. A delay of this length was notexpected when the numerous past extensions of the ExclusivePeriods were granted.

Mr. McLaughlin observes that the Debtors are silent on the statusof their exit financing and revised business plan. The Debtorsalso fail to provide an update on the status of negotiations withother unsecured creditors. In previous requests, the Debtorsargued that these important matters demanded more time forresolution. It is telling that the Debtors fail to elaborate onthese issues now.

Mr. McLaughlin says that the Debtors' reliance on conclusorystatements does not satisfy the requirement of "cause" for anextension contained in Section 1121(d) of the Bankruptcy Code.Therefore, the Court should deny the request.

Among the slim pickings, the Debtors assure the Court that theywill ask for another extension at the August 26 omnibus hearing.At that time, the Debtors promise to provide a timetable foremergence from bankruptcy. Interested parties cannot be pleasedwith such lowly targets at this stage in the proceedings, Ms.Parcelli tells Judge Wedoff.

The Debtors appear to believe that as long as they carry out theresponsibilities of a debtor-in-possession, they are entitled toan endless stream of extensions. However, the threshold formaintaining exclusivity is much higher, Ms. Parcelli says.

The Committee Sides With Debtors

The Official Committee of Unsecured Creditors, represented byCarole Neville, Esq., at Sonnenschein, Nath & Rosenthal, in NewYork City, supports the Debtors' request for another extension oftheir Exclusive Periods. However, the Committee does notsanction the Debtors' implication that there are not qualifiedparties interested in submitting alternate plans.

* * *

The Court grants the Debtors' request. The Debtors' ExclusivePlan Filing Period is extended until Sept. 1, 2005, and theirExclusive Solicitation Period is extended until Nov. 1, 2005.

Headquartered in Chicago, Illinois, USG Corporation --http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing awide range of products for use in new residential, newnonresidential and repair and remodel construction, as well asproducts used in certain industrial processes. The Company filedfor chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.01-02094). David G. Heiman, Esq., and Paul E. Harner, Esq., atJones Day represent the Debtors in their restructuring efforts.When the Debtors filed for protection from their creditors, theylisted $3,252,000,000 in assets and $2,739,000,000 in debts. (USGBankruptcy News, Issue No. 89; Bankruptcy Creditors' Service,Inc., 215/945-7000)

In the September 29, 2004 press release on USI, Moody's statedthat it "considers the company to be thinly capitalized and weaklypositioned in its rating category." Furthermore, although thecompany's recent performance has been above Moody's expectations,the company is applying $20 million of the transactions proceedstowards dividends thereby reducing the improvement to thecompany's balance sheet that had accrued through its recentperformance.

The company's revenue concentration is significant and itsbusiness is highly cyclical. With this acquisition, USI willincrease its revenue concentration in Florida to over 40% of totalrevenues. The company's purchase of CSCI (shell contractor)increases the company's reliance on the new construction market.The company's insulation business is cyclical and would suffer ifweakness in new home construction was not offset by demand fromthe remodeling market.

The ratings are supported by the company's strong margins andhealthy free cash flow. The company's EBITDA margin has beengrowing steadily over the past four years and for 2004 it reached19% from the 17% level achieved in 2002. Free cash flow has alsobeen improving, increasing to $49 million in 2004 from $39 millionin 2003. Supporting USI's healthy cash flows are its low capitalexpenditure requirements and typically low working capital swings.

USI's performance has benefited from strong growth in homebuildingand remodeling. The company is geographically diversified with 50branches across 15 states but, as mentioned, USI has low customerconcentration with no single customer accounting for more than 5%of 2004's revenues on a proforma basis. The company'srelationships include eight of the ten largest homebuilders.

The ratings also benefit from a highly variable cost structure.Per Moody's understanding, approximately 80% of the company'scosts are variable and 20% are fixed. This provides the companywith the flexibility to cut costs quickly in the event of aconstruction downturn.

The company remains weakly positioned in the B1 rating categorydue to its weak balance sheet. USI's stable ratings outlook couldimprove if the improvement in cash flows in the coming quartersallows the company to de-leverage itself more rapidly and buildits equity base. Conversely, the ratings could deteriorate:

* if the housing market conditions weaken; * if the company were to lose market share; * if free cash flow to total debt was to decline below 8%; or * if the company's balance sheet were to weaken further.

An upgrade in the ratings or outlook may occur if the company'sfree cash flow to total debt was above 12% on a sustainable basisand its debt to capital improved to less than 55%.

Projected fiscal year end 2005 debt to EBITDA is expected to bearound 3.0 times and, while strong for the rating category, isbefore adjusting for $70 million of preferred equity on itsbalance sheet that has certain debt like characteristics.Excluding the preferred instrument, projected EBITDA coverage ofinterest for 2005 is expected to be around 4.0 times.

The company's debt covenants, subject to final documentation, areanticipated to include:

The facilities will be secured by a first priority lien onsubstantially all tangible and intangible assets and stock of USIand its subsidiaries. The early retirement of the $26 millionsecond lien facilities is the reason why Moody's has upgraded thecompany's issuer rating to B3 from Caa1.

United Subcontractors, Inc., is headquartered in Minneapolis,Minnesota. Proforma revenues for 2004 were $315 million.

VERY LTD: Has Until Sept. 30 to Decide on Madison Avenue Lease---------------------------------------------------------------The Honorable Burton R. Lifland of the U.S. Bankruptcy Court forthe Southern District of New York granted Very, Ltd.'s request formore time to decide whether to assume, assume and assign, orreject its unexpired nonresidential real property lease with SGL625 Lesee LLC.

The extension gives the Debtor until September 30, 2005, to make adecision on the unexpired nonresidential lease property located at625 Madison Avenue in New York City.

The Debtor currently operates the Au Bar, Le Jazz Au Bar and 58within the leased property. The lessor, SGL 625, collectsapproximately $44,000 per month in rent under the lease.

The Debtor says that it has made steady progress in rehabilitatingits business and acting prematurely with respect to the leasecould have a drastic affect on the rights and claims of itscreditors.

The Debtor assures Judge Lifland that the extension will notprejudice its creditors and that it is current on all postpetitionrent obligations.

Headquartered in New York, Very, Ltd., owns and operates a high-class, first-rate nightclub. The Debtor filed for chapter 11protection on April 5, 2005 (Bankr. S.D.N.Y. Case No. 05-12248).When the Debtor filed for protection from its creditors, it listed$100,000 is assets and total debts of more than $1 million indebts.

WALTER INDUSTRIES: Acquisition Plan Cues Moody's to Review Ratings------------------------------------------------------------------Moody's Investors Service placed the ratings of Walter Industries,Inc., on review for possible downgrade. The review was promptedby Walter's announcement that it has entered into a definitiveagreement to acquire Mueller Water Products.

In its review, Moody's will access the impact of the $1.9 billionpurchase price, which is comprised of $860 million in cash plusthe $1.05 billion in existing debt at Mueller Water Products, onWalter's overall credit quality and capital structure. Moody'snoted in its March 18, 2005 press release that continuedmaintenance of the stable outlook was subject to an improvement inthe company's homebuilding business.

Hence, Moody's will also access the performance and outlook forWalter's other operations where an increase in metallurgical coalprices during 2004 allowed the company to generate significantlyhigher free cash flow even though its homebuilding businessdeteriorated. Walter Industries operates a total of five separatebusiness segments with its U.S. Pipe operations being the largestcomprising 37% of total revenues. While Walter's acquisition ofMueller will complement and strengthen Walter's market share inthe pipe and related equipment segment, demand for its piperelated products will continue to be primarily driven by newconstruction and the replacement of aging pipe.

Headquartered in Tampa, FL., Walter Industries is a diversifiedcompany that operates in five reportable segments:

WESTPOINT STEVENS: Aretex LLC Wants Escrow Order Dissolved----------------------------------------------------------As previously reported in the Troubled Company Reporter on May 17,2005, the 2nd Lien Agent asked the U.S. Bankruptcy Court for theSouthern District of New York to:

(a) terminate the adequate protection escrow, direct the Escrow Agent to release the escrowed adequate protection payments forthwith to the 2nd Lien Agent, and reinstate direct payments from WestPoint Stevens, Inc. and its debtor-affiliates to the 2nd Lien Agent; or

(b) establish a schedule for the submission of expert reports concerning the valuation of the 2nd Lien Lenders' collateral as of the Petition Date and set a hearing for further determination of its Motion.

The Escrow Order

Gary M. Becker, Esq., at Kramer Levin Naftalis & Frankel LLP, inNew York, relates that adequate protection payments of $31 millionwere made to Wilmington Trust Company, as Agent to the 2nd LienCredit Agreement, through July 2004. In August 2004, R2 Top Hat,as holder of 40% of the 1st Lien claims, objected to thecontinuation of adequate protection payments to the 2nd LienLenders. To avoid a distracting fight over the issue at thattime, the 1st Lien Agent, 2nd Lien Agent, the Debtors and theagent under the DIP Loan agreed, in a Court-approved stipulation,to escrow future adequate protection payments due the 2nd LienLenders.

Since the entry of the Escrow Order, $2 million per month inadequate protection payments, starting with the payment due at theend of August 2004, have been placed in an account with the escrowagent, Wells Fargo Bank, N.A. As of May 10, 2005, the amount inescrow exceeds $18 million, with another $2 million due to bedeposited at the end of May. Therefore, the amount in escrow atthe Purchaser Selection Hearing on June 24, 2005, is expected tobe $20 million. Pursuant to the Escrow Order, amounts held inescrow may be released by the Escrow Agent upon the entry of anorder from the Court adjudicating the relative rights of the DIPlender, the 1st Lien Lenders, the 2nd Lien Lenders and the Debtorsto the escrowed funds. The Escrow Order also provides that noneof the amounts in escrow may be released to the Debtors or anyother party -- except the DIP Lenders, 1st Lien Lenders or 2ndLien Lenders -- until the DIP, the 1st Lien Obligations and the2nd Lien Obligations have been satisfied in full.

The Escrow Order contemplates that, once a hearing date has beenset for the sale of substantially all the Debtors' assets or forconfirmation of a plan of reorganization, the 2nd Lien Agent mayfile a motion seeking a determination as to the allocation of theamounts held in escrow.

Objections

(1) Bank of America

Bank of America, N.A., as Administrative Agent under the DIPCredit Agreement, believes that the request of Wilmington TrustCompany, as Agent to the Second Lien Credit Agreement, ispremature because it violates the letter and the spirit of theagreed Escrow Order. The Escrow Order, Bank of America relates,made specific provisions for the timing of the release of theEscrowed Interest Payments from the escrow. The Request seeks todisturb that scheme.

Pursuant to the Escrow Order, the Escrow Payments are to remain inescrow until no earlier than the first to occur of a confirmationhearing, a sale hearing, or a hearing or a conversion hearing inthe Chapter 11 cases, unless otherwise agreed by the First LienAgent, the First Lien Lenders holding a majority of the First LienCredit Facility, the DIP Agent, and the Second Line Agent. Noneof those hearings has occurred.

Bank of America notes that depending on the results of the auctionand confirmation hearing, it is quite possible that the Requestwill be moot. If the anticipated sale and plan generate proceedssufficient to pay the DIP Loans and the First Lien Lenders' loans,the disposition of the Escrowed Interest Payments will not likelybe controversial and will be governed by the terms of the EscrowedOrder. Bank of America believes that to conduct a full-blownhearing on the Request at this point potentially would be a wasteof judicial resources.

(2) First Lien Agent

Beal Bank, S.S.B., in its capacity as Successor First Lien Agent,objects to the Second Lien Lenders' request to release escrowedfunds.

The consummation of a sale of the assets or, failing that, amotion to convert the Debtors' cases to Chapter 7 will allow theDIP Agent, the First Lien Lenders and the Second Lien Lenders todetermine:

(a) whether their interests are adequately protected; and

(b) the relative rights among the DIP Agent, the First Lien Lenders and the Second Lien Lenders to the Escrowed Interest Payments as provided in the Escrow Order.

The First Lien Agent believes that the Request is premature, andthat the Second Lien Lenders' interests are adequately protectedby the continuation of the Escrow Order and the escrow agreementprovided therein until the conditions for disbursement from theescrow are met in accordance with the terms of the Escrow Order.

(3) Steering Committee

The Steering Committee for the First Lien Lenders contend that theSecond Lien Agent incorrectly asserts that the First Lien Lenders'sole remedy with respect to the escrowed amounts is to requireapplication of the escrowed amounts to the principal amount of theSecond Lien Indebtedness. The Steering Committee believes thatAdequate Protection Order is inapplicable with respect to theescrowed funds.

Given that the First Lien Lenders have senior rights to theescrowed funds, the issue is whether the Court should conduct avaluation hearing to determine how to distribute those funds now.In all events, there is no need to have judicial determination ofvalue. A sale of the Debtors' business is going to occur and anauction will be held on June 21, 2005. A purchaser will beselected on June 24, 2005. That process should generate cashproceeds. Those proceeds will be distributed according to thepriorities of the parties' claims. If the proceeds areinsufficient to repay the First Lien Indebtedness then, under theIntercreditor Agreement, the First Lien Lenders have the right tolook to the escrowed funds before the Second Lien Lenders receiveany further payment. If the First Lien Lenders receive payment infull, then the Second Lien Lenders will have rights to theescrowed funds.

Accordingly, the Steering Committee asks the Court to deny theRequest.

Net income was $8.3 million in the first quarter of 2005, comparedto $8.4 million in the first quarter of 2004. The first quarterof 2005 reflects incremental public company related costs of $1.3million and incremental restructuring costs of $4.0 million thatwere not incurred in the first quarter of 2004. Net salesincreased $6.2 million, or 4.2%, to $153.0 million, from $146.8million for the first quarter of 2004.

Net cash provided by operating activities increased $5.0 million,or 39.1%, to $17.8 million, from $12.8 million in the firstquarter of 2004. Cash on hand at March 31, 2005 was $39.8million, a $15.8 million increase from $24.0 million at December31, 2004.

Operating income was $26.0 million, compared to $29.6 million inthe first quarter of 2004. Operating income for the first quarterof 2005 reflects the same $1.3 million of costs associated withbecoming a public company as well as $4.0 million of incrementalrestructuring costs related to cost reduction programs as comparedto the first quarter of 2004.

Thomas Gutierrez, Chief Executive Officer of Xerium Technologies,said, "During the first quarter this year, our company continuedits strong performance despite continued marketplace challenges.Net sales increased 4.2%, and we are especially pleased with thestrong operating cash flow the business generated.

The results in our clothing segment, where net sales increased by9.3% and Segment Earnings increased by 14.2% compared to the firstquarter of 2004, were particularly satisfying given theinvestments in technology and restructuring that we have made inthis segment over the last several years. We believe that wecontinue to gain market share in the clothing segment."

He continued, "In the roll covers segment, consistent with ourgeneral expectations, net sales decreased by 4.2% and SegmentEarnings fell 12.9% from first quarter 2004 levels. We believethat our global market share in the roll covers segment hasremained stable as the market has contracted due to mill closuresand paper machine shutdowns. These mill closures and machineshutdowns started to significantly impact our business in thesecond half of 2004 and this impact has been amplified by the factthat the machines that have been taken out of service utilizedsome of our more profitable roll cover products. We believe thatplanned new product introductions, starting in July of this year,and the restructuring actions that we have taken in the rollscovers segment, will drive results in the second half of theyear."

He added, "Cash generation is one of the principal strengths ofour business and we were pleased with our working capitalperformance and cash flow generation in the first quarter of thisyear. As has been the case in the past, we expect that Xeriumwill continue to deliver strong cash flows to provide investmentin the business, improve our capital structure and support theCompany's stated initial dividend policy."

Mr. Gutierrez continued, "It is clear that on a global basis, thepaper industry recovery that many have expected has not yetoccurred. We believe that the market for our products is stillreflecting the impact of the numerous mill closures that haveoccurred and the significant number of paper machines that havebeen taken out of service over the last several years. It alsoappears that the early effects of the labor unrest at paper millsin Finland resulted in lower paper production operating rates andimpacted sales for Xerium Technologies in that region during thefirst quarter of 2005. Putting aside the labor issues in Finland,we believe that the market for our products, on a global basis,has stabilized.

"Looking ahead," he added, "we continue to be a technical leaderin the market with a demonstrated ability to identify and delivercost, efficiency and quality improvement programs that ourcustomers value highly as they strive to improve theirprofitability. Our success in building these strong customerrelationships has enabled us to improve our position even indifficult market conditions, and we expect this to continue goingforward. In addition, we have continued to improve our coststructure and have several restructuring programs under way thatwe expect will generate significant benefits in the comingquarters."

IPO Completion

On May 19, 2005 the Company completed its initial public offering.Xerium Technologies was formerly an indirect, wholly owned-subsidiary of Xerium S.A., and after a reorganization undertakenprior to the offering, Xerium Technologies directly or indirectlyholds all of the operating subsidiaries and related holdingcompanies of the prior Xerium S.A. group excluding the formerparent, Xerium S.A., and its two immediate holding companysubsidiaries, Xerium 2 S.A. and Xerium 3 S.A.

In connection with the offering, the Company effected a31,013,482-for-1 stock split. All share and per share amountsrelated to common stock included in the accompanying consolidatedfinancial statements have been restated to reflect the stocksplit. After Xerium Technologies' issuance of 13,399,233 sharesof common stock at $12.00 per share in the offering and otherrelated transactions, there were approximately 43.7 million sharesof common stock of Xerium Technologies outstanding.

Credit Facility

In connection with the initial public offering, XeriumTechnologies also entered into a new $750 million credit facilityagreement, of which $650 million was borrowed in connection withthe offering. Xerium Technologies repaid approximately $753million of indebtedness under its previously existing debtfacilities in connection with the offering.

Cost Reduction Programs

Xerium Technologies' cost reduction programs, including plantclosures designed to rationalize production among facilities andheadcount reductions, have been proceeding on schedule. Thesecost reduction efforts eliminated approximately $2.0 million incash costs that would have otherwise been incurred in the firstquarter of 2005 as compared to the Company's cost structure in thefirst quarter of 2004.

Xerium Technologies, Inc. (NYSE: XRM) is a leading globalmanufacturer and supplier of two types of consumable products usedprimarily in the production of paper: clothing and roll covers.The Company, which operates around the world under a variety ofbrand names, utilizes a broad portfolio of patented andproprietary technologies to provide customers with tailoredsolutions and products integral to production, all designed tooptimize performance and reduce operational costs. With 35manufacturing facilities in 15 countries around the world, XeriumTechnologies has approximately 3,900 employees.

YUKOS OIL: Losses in First 2005 Quarter Exceed Rub4 Billion-----------------------------------------------------------The oil company YUKOS sustained a net loss of 4.864 billion rublesin the first quarter of 2005, according to Russian accountingstandards.

In the first quarter of 2004, the company had a profit of2.4 billion rubles, YUKOS said in a press release on Wednesday.

Its net loss in the fourth quarter of 2004 was 234.780 billionrubles.

The company explained the dramatic change in its net losses by thereduction of operating and non-sales expenses.

Revenue for the year ended March 31, 2005 was $10,027,045, asignificant increase from $2,107,099 for the ten months endedMarch 31, 2004. ZIM's revenue growth this year is predominantly aresult of providing messaging services to mobile contentproviders, including premium and bulk SMS.

Net loss for the year ended March 31, 2005 was $3,964,107. Thenet loss for the ten months ended March 31, 2004 was $1,672,597.Included in the net loss for the year ended March 31, 2005 arenon-cash amounts of $1,199,453 relating to the impairment of thetechnology and the customer list purchased in the EPL acquisition.Due to changes in the technology being used for ZIM's aggregatorservices and the development of new strategic partnerships,management does not expect future value from these assets and as aresult an impairment was recorded. In addition, there has been animpairment of $530,270 in the goodwill relating to our Brazilianoperations.

ZIM's balance sheet remained relatively stable with cash of$737,888 at March 31, 2005 as compared to $870,520 at March 31,2004. During the fiscal year ended March 31, 2005, ZIM raised$1,621,236 through financing activities, including privateplacements and share option exercises. During the ten monthsended March 31, 2004, ZIM raised $2,423,332 through financingactivities.

Going Concern Doubt

The Company has generated negative cash flows from operationsduring each of the last five years. For the year ended March 31,2005, the Company used $1,762,459 of cash from operations.

These factors, among others, prompted Raymond Chabot GrantThornton LLP, to express substantial doubt about the Company'sability to continue as a going concern after it audited itsfinancial statements for the fiscal year ended March 31, 2005.

Management's plans to address these issues by continuing to raisecapital through the placement of equity, obtaining advances fromrelated parties and, if necessary, renegotiating the repaymentterms of accounts payable and accrued liabilities. The Company'sability to continue as a going concern is subject to management'sability to successfully implement the above plans. Failure toimplement these plans could have a material adverse effect on theCompany's position and results of operations and may necessitate areduction in operating activities.

ZIM Corporation -- http://www.zim.biz/-- is a leading mobile service provider, aggregator and application developer for theglobal SMS channel. ZIM's products include mobile e-mail andoffice tools, such as ZIM SMS Chat, and its message deliveryservices include Bulk SMS, Premium SMS and Location BasedServices. ZIM is also a provider of enterprise-class software andtools for designing, developing and manipulating database systemsand applications. Through its two-way SMS expertise and mobile-enabling technologies, ZIM bridges the gap between data andmobility.

Mr. King will serve as the firm's vice chairman and nationaltechnical manager, financial valuation and consulting. Mr.Kleeman is the new executive vice president, national practiceleader for financial valuation and consulting. Both men bringmore than 35 years of valuation experience with mergers,acquisitions, divestitures, financings and litigation to theirroles at Marshall & Stevens.

Mr. King will consult on the valuation of intangible assets,complex allocations-of-purchase-price, business combinations, andanalyses relating to domestic and international taxes andfinancial reporting. He has provided litigation support specificto trademark infringement and business valuation issues, andtestified in bankruptcy court.

Four years ago, through the AICPA, King spearheaded the AppraisalIssues Task Force for the SEC in which he is still activelyinvolved. A former managing director of the Institute ofManagement Accountants, King currently serves on its FinancialReporting Committee.

King has authored numerous books and articles related tovaluation. Several of his editorials have been awardedcertificates of merit by the Institute for Management Accountants.His most recent book, "Valuation: What Assets Are Really Worth,"was published in 2002.

Robert Kleeman's primary focus at Marshall & Stevens will be theissuance of fairness and solvency opinions, complex financialvaluations, and litigation support. His litigation supportexperience includes assignments for U.S. Department of Justice,FDIC, the IRS, and the RTC. In addition, his experience includesconsulting with major law firms in numerous states.

A member of the AICPA, Kleeman has served on its BusinessValuation Subcommittee and chaired its Business ValuationConference, along with serving on the ABV Credential Subcommittee.He has also served three years on the Education Board of NACVA(National Association of Certified Valuation Analysts). Kleemanhas taught continuing professional education courses on valuationand expert testimony. He has served on numerous committees withinthe state CPA societies of Colorado and Illinois.

Marshall & Stevens is one of the premier, independent,multidisciplinary valuation firms in the world. Its professionalsprovide fairness and solvency opinions, and the valuation ofbusinesses and business assets, both tangible and intangible, topublic and private corporations. Headquartered in Los Angeles,California, Marshall & Stevens has offices in Atlanta, Chicago,Denver, Houston, New York, Philadelphia, San Francisco, St. Louis,and Tampa.

Dennis O'Grady, the Chairman of Riker Danzig's bankruptcy group,said, "Rick brings tremendous experience in nationalreorganization cases in which he has represented creditors,lenders, indenture trustees, debtors and other parties."

O'Grady added, "For private equity investors looking to do dealsin the complex world of distressed investing in insolventcompanies, Rick is one of the 'go to' lawyers in the country. Hisbusiness and legal skills are reflected in two books he haswritten and edited on the subject of buying and selling companiesin financial distress. His most recent book, Bankruptcy BusinessAcquisitions (Lex Med Publications), which he edited and co-wrote,is widely acknowledged as the definitive work on the business andlegal issues that investors encounter in doing deals. We lookforward to expanding our work with our financial and bank clientsin the area of distressed mergers and acquisitions."

Mr. Tilton is a well-known commentator on insolvency/bankruptcyissues and has appeared on television and national public radio.He is frequently interviewed and quoted on the business insolvencyissues that arise in cases of national interest, and has beenquoted in publications such as Reuters, Bloomberg News, USA Today,Investors Business Daily, dowjones.com, and the Los Angeles Times.He has written over fifty articles published in journals such asBusiness Credit, Commercial Lending Review, the New Jersey LawJournal, and the New York Law Journal.

Mr. Tilton is a graduate of Cornell Law School and WesleyanUniversity. He is admitted to practice law in New Jersey and NewYork, and represents clients in bankruptcy cases throughout theUnited States.

"Seth has played a key role in Huron's growth and success. Ourclients have greatly benefited from his extensive experience invaluation and corporate finance," said Gary E. Holdren, chairmanand chief executive officer, Huron Consulting Group. "We lookforward to his leadership in his new role as the national practiceleader of Huron's Valuation practice."

For more than 20 years, Mr. Palatnik has been actively involved invaluation and corporate finance matters. He has a broad depth ofexperience valuing companies, partnerships and intangible assets.

Prior to joining Huron Consulting Group in 2003, Mr. Palatnik wasa partner and national director of the Valuation Services Practiceat BDO Seidman, LLP. Before BDO, Mr. Palatnik was a seniormanager at KPMG Peat Marwick and spent several years in theindustry as a financial analyst.

Mr. Palatnik received his B.S. in Accounting and M.B.A., with aconcentration in finance and marketing, from the University ofIllinois. He is an accredited senior member of the AmericanSociety of Appraisers. He is also a member of the TurnaroundManagement Association -- TMA, American Bankruptcy Institute --ABI, Business Valuation Association, the Chicago Business Forum,and other local and national associations. As part of his civicinvolvement, Mr. Palatnik is a member of the Finance Committee ofthe Greater Chicago Food Depository.

About Huron Consulting Group

Huron Consulting Group -- http://www.huronconsultinggroup.com/-- helps clients effectively address complex challenges that arisefrom litigation, disputes, investigations, regulation, financialdistress, and other sources of significant conflict or change.The company also helps clients improve the overall efficiency andeffectiveness of their operations, reduce costs, manage regulatorycompliance, and maximize procurement efficiency. Huron providesservices to a wide variety of both financially sound anddistressed organizations, including Fortune 500 companies, medium-sized businesses, leading academic institutions, healthcareorganizations, and the law firms that represent these variousorganizations.

* The Garden City Group Promotes Jennifer M. Keough to Senior VP----------------------------------------------------------------David A. Isaac, president of The Garden City Group, Inc., reportedthe promotion of Jennifer M. Keough to senior vice president andmanaging director of the company's west coast operations. Ms.Keough previously held the title of vice president and managingdirector, west coast operations.

"Since joining the firm two years ago, Jennifer has madesignificant contributions to the extraordinary success of our westcoast operations," said Mr. Isaac. "She brings to ourorganization an extensive background in managing class actionadministration that will continue to serve our clients well."

As a former GCG client and class action business analyst, Keoughhas an insider's experience of the class action processes. Shewas responsible for managing the settlement implementation andadministration process for large class action settlements at thePerkins Coie law firm and prior to that, she gained her legalexpertise while working for a highly regarded civil litigationfirm in Seattle.

"Our west coast operations complement our regional officesthroughout the country, and enable us to provide high quality,cost-effective service to clients and claimants coast-to-coast,"said Keough. "Since I joined GCG, we have successfully expandedour west coast operations team -- a team comprised of people whostand behind their work, keep their word, and meet theirdeadlines. These are the same qualities that impressed me when Iwas a GCG client," added Ms. Keough. "I am proud to be part ofthe GCG team."

Ms. Keough did her undergraduate and business graduate work atSeattle University Albers School of Business, where she graduatedcum laude with a B.A. in Business Management and a Masters inFinance and Valuation. She received her J.D. from SeattleUniversity, where she authored the article "Navigating the EthicalChallenges of Representing Older Clients."

Based in Atlanta, Georgia, Crawford & Company -- http://www.crawfordandcompany.com/-- is the world's largest independent provider of claims management solutions to insurancecompanies and self-insured entities, with a global network of morethan 700 offices in 63 countries. Major service lines includeworkers' compensation claims administration and healthcaremanagement services, property and casualty claims management, andrisk management information services. The Company's shares aretraded on the NYSE under the symbols CRDA and CRDB.

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Monday's edition of the TCR delivers a list of indicative pricesfor bond issues that reportedly trade well below par. Prices areobtained by TCR editors from a variety of outside sources duringthe prior week we think are reliable. Those sources may not,however, be complete or accurate. The Monday Bond Pricing tableis compiled on the Friday prior to publication. Prices reportedare not intended to reflect actual trades. Prices for actualtrades are probably different. Our objective is to shareinformation, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy orsell any security of any kind. It is likely that some entityaffiliated with a TCR editor holds some position in the issuers'public debt and equity securities about which we report.

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